Gold falls in the US amid expectations of a Fed rate hike
In the United States, the spot price of gold fell by 0.6% on September 7 to $4,402.86 per ounce as of 04:20 GMT. Strong US employment data reinforced expectations that the Federal Reserve may raise interest rates. US December gold futures also lost 0.6% and traded at $4,447.60 per ounce.
Labor market data and inflation
As Asharq Al-Awsat reports, US employment growth accelerated noticeably in August, while the unemployment rate remained at 4.1%. This indicated an improvement in the labor market and kept open the possibility of a rate hike this month.
According to the CME FedWatch tool, traders estimated the probability of a rate hike at the Federal Reserve meeting on September 15–16 at 58.4%. Investors are also awaiting the release of the producer price index on Thursday and the consumer price index on Friday. These figures are expected to give the market additional signals about the future course of the US central bank.
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Precious metals reaction
KCM Trade chief market analyst Tim Waterer said that employment statistics were a positive surprise for the market and put pressure on gold, but had not yet provided a clear answer regarding the Fed's decision in September. According to him, strong inflation data could reinforce expectations of a rate hike, raise yields and increase pressure on gold.
Gold is traditionally considered a hedge against inflation, but higher interest rates reduce the appeal of the metal, which does not generate interest income. Silver fell by 0.6% to $65.80 per ounce, platinum lost 1.1% to $1,800.59, and palladium declined by 0.5% to $1,394 per ounce.
