Gold Slumps as Fed Rate Hike Bets Revive, USD Strengthens

Gold prices remain under pressure as the US dollar strengthens due to revived bets on an interest rate hike by the Federal Reserve. The non-yielding commodity has held above $4,400 during the Asian session but is still vulnerable to further losses.

The latest US Nonfarm Payrolls report showed a stronger-than-expected addition of 162K new jobs in August, surpassing consensus estimates and fueling inflation risks. This, combined with higher energy prices, has lifted bets on an interest rate hike by the Fed later this month, supporting the dollar and undermining gold.

However, some analysts believe that the US labor market remains resilient, suggesting that the broader uptrend in gold is still intact. Technical indicators, such as the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI), also hint at a consolidative phase rather than outright exhaustion of the bullish structure.

The XAU/USD pair sits above key support levels, including the 200-day Exponential Moving Average (EMA) and the 50% retracement of the July-August upswing. Immediate resistance emerges at the 38.2% Fibonacci retracement near $4,411, with a break above this pivot exposing higher targets.