Gold and Precious Metals Prices Fall Globally
Stronger-than-expected US employment data and a strengthening dollar pushed global gold and precious metals prices lower, while increasing expectations that the Federal Reserve could raise interest rates.
Spot gold fell 1.2% to $4,419.09 per ounce.
Gold prices dropped more than 2% following the release of the US employment data, reaching an intraday low of $4,364.99 per ounce.
US gold futures for December delivery fell 1.4% to settle at $4,476.60 per ounce.
US job growth accelerated sharply in August, while the unemployment rate remained steady at 4.1%. The data pointed to continued resilience in the US labor market and kept the possibility of a Federal Reserve rate hike this month on the table.
The US dollar strengthened sharply following the release of the employment report. A stronger dollar makes gold, which is priced in US dollars, more expensive for holders of other currencies.
Independent metals trader Tai Wong said gold came under heavy pressure after the release of strong employment data and an overall favorable labor-market report increased the likelihood of a September rate hike, unless the upcoming Consumer Price Index (CPI) report comes in weaker than expected.
Short-term US interest-rate futures now indicate roughly a 65% probability of a rate hike at the Federal Reserve’s September 15–16 meeting, up from around 55% before the US Bureau of Labor Statistics released its employment report.
Investors are now turning their attention to this week’s US Consumer Price Index (CPI) and Producer Price Index (PPI) data, which could provide further clues about the Federal Reserve’s monetary policy path.
Han Tan, chief market analyst at Bybit, said the latest employment report, which followed Federal Reserve Chair Kevin Warsh’s speech in Jackson Hole, had increased expectations of a potential Fed rate hike, possibly as early as this month.
He added that with price stability remaining a key priority for policymakers, the US CPI report could potentially trigger a further move higher in gold prices.
In other precious metals, silver fell 1.7% to $65.83 per ounce, while palladium declined 2.5% to $1,385.50 per ounce. Platinum fell 0.8% to $1,810.96 per ounce. All three metals posted weekly declines.