US Jobs Report Sends Gold Prices Lower Amid Rate Hike Expectations

Gold prices eased on Monday after a strong US jobs report boosted expectations of an interest rate hike by the Federal Reserve this month.

The robust U.S. jobs data released last week saw job growth accelerate sharply in August while the unemployment rate held steady at 4.1%, according to Reuters, citing Ole Hansen, head of commodity strategy at Saxo Bank.

Traders now see a 58% chance of an interest rate hike at the central bank's policy meeting next week, compared with a probability of 50% before the jobs data was released, according to the CME FedWatch Tool.

Despite gold typically being seen as an inflation hedge, higher interest rates tend to diminish non-yielding bullion's appeal to investors. However, US President Donald Trump said last week that unless the Fed cut rates, he would stop trading with countries with which the United States had a deficit.