Precise Investors Editorial Team
Spot gold was down 0.6% at $4,402.86 per ounce
Gold slipped on Monday as strong U.S. jobs data reinforced expectations for higher interest rates, while investors awaited key inflation reports due later this week for further clarity on the central bank’s policy path.
Spot gold was down 0.6% at $4,402.86 per ounce, as of 0420 GMT, after dropping 1% on Friday.
U.S. gold futures for December delivery were down 0.6% at $4,447.60.
Data on Friday showed U.S. job growth accelerated sharply in August while the unemployment rate held steady at 4.1%, suggesting an improvement in the labour market after recent struggles and keeping a rate increase this month on the table.
U.S. producer price index (PPI) data is due on Thursday, followed by consumer price index (CPI) data on Friday.
The jobs number delivered a clear upside surprise and put some pressure on the metal, but it wasn’t a complete slam dunk for a September rate hike. The real missing piece of the puzzle arrives this week with U.S. CPI, said Tim Waterer, chief market analyst at KCM Trade.
A strong inflation print would reinforce expectations of a Fed hike, lift yields further and weigh more heavily on gold, he said.
Traders are pricing in a 58.4% chance of a rate hike at the central bank’s September 15-16 meeting, CME’s FedWatch tool showed.
While gold is typically viewed as an inflation hedge, higher interest rates tend to weigh on the appeal of non-yielding bullion.
U.S. president said on Friday that unless the central bank cuts interest rates, he would stop trading with countries with which the U.S. had a deficit.
On the Middle East front, Iran said it will step up efforts to tackle U.S. sanctions, while a senior Iranian official warned of a “painful response” if it comes under further attack.
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