Gold Prices Slide as US Job Growth Fuels Rate Hike Speculation
Gold prices dropped on Monday after stronger-than-expected US employment data reinforced expectations of higher interest rates. The Labor Department's release of August job growth and unemployment figures showed a sharp acceleration in hiring, with the unemployment rate remaining steady at 4.1%. This has increased speculation about a potential September interest rate hike by the Federal Reserve.
The spot gold price fell 0.6% to $4,402.86 per ounce, while US gold futures for December delivery dropped 0.6% to $4,447.60. The decline in gold prices follows last week's 1% drop on Friday.
Traders currently assign a 58.4% probability of a rate hike at the Federal Reserve's September 15-16 meeting, according to CME's FedWatch tool. Higher interest rates typically reduce the appeal of non-yielding assets like gold.