US Jobs Data Weighs Heavily on Gold Prices
Gold prices fell on Monday due to stronger-than-expected US jobs data, which reinforced expectations of higher interest rates. The data showed that US job growth accelerated sharply in August, while the unemployment rate remained unchanged at 4.1 per cent.
The Federal Reserve's policy direction is now being closely watched by investors, who are awaiting key US inflation reports due later this week. On Thursday, US Producer Price Index (PPI) data will be released, followed by Consumer Price Index (CPI) figures on Friday.
According to Tim Waterer, Chief Market Analyst at KCM Trade, the stronger jobs data had weighed on gold prices but had not completely cemented expectations of a September rate increase. He noted that 'a strong inflation print would reinforce expectations of a Fed hike, lift yields further and weigh more heavily on gold.'
The probability of a rate increase at the Federal Reserve's 15-16 September meeting is currently priced in at 58.4 per cent by traders using CME's FedWatch tool.