Gold Prices Dip as Strong US Jobs Data Boosts Fed Rate-Hike Bets

Gold prices fell on Monday after a strong US jobs report boosted expectations of a Federal Reserve interest rate hike this month. The robust employment data sent bond yields higher, further supporting the case for a rate increase.

Saxo Bank's head of commodity strategy, Ole Hansen, noted that gold and silver have moved in opposite directions to energy prices, extending their declines after Friday's strong US jobs report.

The Federal Reserve is set to meet next week, with traders now seeing a 58% chance of an interest rate hike compared to 50% before the jobs data was released on Friday. The US producer price index data is due on Thursday and consumer price index data scheduled for the following day.

Despite inflation worries remaining high, gold's appeal as an inflation hedge has been diminished by higher interest rates. However, a statement from US President Donald Trump on Friday suggested that he would consider trade restrictions unless the Fed cuts rates.