Gold prices fell on Monday on strong U.S. jobs report

Gold prices fell on Monday (7th). (Reuters)

[Financial Channel/Comprehensive Report] Gold prices fell on Monday (7th) after the strong U.S. employment report released last Friday (4th) strengthened market expectations for the Federal Reserve to raise interest rates this month, while investors awaited key inflation data to seek further clues about the outlook for monetary policy.

Spot gold fell 0.4% to $4,410.55 an ounce. Due to the holiday in the United States, trading volume was low. U.S. gold futures for December delivery fell 0.5% to US$4,456.40 an ounce.

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Ole Hansen, head of commodity strategy at Saxo Bank, said: "Gold and silver have moved inversely to energy prices, extending their losses after Friday's strong U.S. jobs report pushed up bond yields and reinforced market expectations for a September 16 interest rate hike by the Federal Reserve."

He said: "In today's trading, gold twice received buying support below $4,400, well above the key support level of approximately $4,320; at the same time, selling pressure continued above $4,500."

Data released last week showed that U.S. job growth accelerated sharply in August, while the unemployment rate remained unchanged at 4.1%.

According to the CME FedWatch tool, traders believe there is a 60% chance that the Federal Reserve will raise interest rates at next week's policy meeting, which is higher than the 50% chance before the employment data was released.

The US producer price index (PPI) data will be released on Thursday (10th), while the consumer price index (CPI) data is scheduled to be released the next day (11th).

Inflation concerns remain in high gear as reciprocal attacks on shipping pushed up oil prices over the weekend and Iran said it would announce new restricted areas in the Gulf in the coming days and unveil a map of a new shipping corridor through the Strait of Hormuz.

While gold is often viewed as an anti-inflation tool, higher interest rates tend to make non-interest-bearing gold less attractive to investors.

However, U.S. President Trump said on Friday that unless the Federal Reserve cuts interest rates, he will stop trade with countries with which the United States has a trade deficit.

In terms of other precious metals, spot silver rose slightly by 0.1% to US$66.24 per ounce; platinum rose by 0.5% to US$1,827; palladium rose by 0.2% to US$1,389.72.

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