Gold Takes Hit as Robust US Jobs Data Boosts Rate Hike Bets
Gold prices plummeted on Friday after robust US payrolls data bolstered expectations of an interest rate hike by the Federal Reserve this month. Spot gold dropped 1.1% to $4,422.91 per ounce by 10:50 a.m. EDT (1447 GMT), putting it on track for a mild weekly decline.
US job growth accelerated sharply in August while the unemployment rate remained steady at 4.1%, pointing to a stable labor market and increasing the likelihood of an interest rate hike this month. The jobs report marked a significant milestone, with short-term interest rate futures prices now implying about a 65% chance of an increase in the US policy rate at the Fed's September 15-16 meeting, up from around 55% before the Bureau of Labor Statistics report.
Independent analyst Tai Wong noted that gold stumbled badly as a result of the strong headline print and overall robust report. 'Gold stumbles badly as a huge headline print... makes a September rate hike much more likely unless we get a weak CPI report,' he said.