Gold Slumps as US Jobs Data Fuels Fed Rate Hike Expectations
Strong US employment data released on September 4 has significantly increased expectations for a Federal Reserve interest-rate increase in September, weighing heavily on gold prices.
According to Bloomberg, spot gold fell 0.1% to $4,425.37 an ounce as of 8:28 a.m. in Singapore on September 6, following a 1% drop the previous session.
The sharp increase in payrolls and stable unemployment rate have bolstered expectations that the Fed could raise rates at its September 15-16 Federal Open Market Committee meeting, with market pricing now implying about a 60% chance of a September rate hike.
Gold's decline is also attributed to concerns over inflation, as Brent crude approached $97 a barrel due to fears of supply disruptions in the Middle East.
'Gold is moving back into the center of another macroeconomic storm,' said Hebe Chen, senior analyst at Vantage Markets. 'Surging oil prices, elevated US Treasury yields, and strong jobs data are reviving familiar headwinds for bullion by strengthening the case for another Fed rate increase.'