Gold Prices Tumble as Strong US Employment Data Raises Rate Hike Expectations

The U.S. non-farm payrolls released on September 7 significantly exceeded expectations, rising by 162,000 in August.

This strong employment data led to a sharp increase in the probability of a Federal Reserve rate hike in September, up to about 58.3% from 50.2%, putting pressure on gold prices.

The market expects U.S. rates to remain high or rise further, increasing the opportunity cost of holding gold versus dollar assets.

Investors quickly increased their bets on Fed tightening in September, prompting profit-taking and capital outflows in gold.

This week's U.S. PPI and CPI data will become key variables to determine the market's direction, with a weak inflation reading potentially reversing rate hike expectations.