Gold Prices Slide as US Jobs Data Stokes Rate Hike Expectations
Gold prices declined on Monday as robust US jobs data reinforced expectations for higher interest rates. The strong August employment report, which showed job growth accelerating sharply and an unemployment rate holding steady at 4.1%, put pressure on gold. Despite this, the metal isn't yet considered a done deal for a September rate hike by the Federal Reserve.
US inflation data due later in the week will provide further clarity on the Fed's policy path. 'The jobs number delivered a clear upside surprise and put some pressure on the metal, but it wasn’t a complete slam dunk for a September rate hike,' said Tim Waterer, chief market analyst at KCM Trade.
A strong inflation print would reinforce expectations of a Fed hike, lift yields further, and weigh more heavily on gold. Traders are currently pricing in a 58.4% chance of a rate hike at the Fed's September 15-16 meeting.