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🇸🇦 Saudi Arabia /Economy & Trade

Gold Slips on Rate-Hike Bets as Investors Await Inflation Data

From Asharq Al-Awsat · () English

Translated from English and summarized by DistantNews. Read the original for the full story.

At a glance

Newswire Named sources Ongoing story
  • Gold fell after strong US jobs data increased expectations that the Federal Reserve could raise interest rates this month.
  • Investors are awaiting producer and consumer inflation data later in the week for further clues about the Fed's policy path.
  • Traders priced a 58.4% chance of a rate increase at the Fed's Sept. 15-16 meeting, while other precious metals also declined.

Gold fell on Monday as stronger US jobs data reinforced expectations of higher interest rates, while investors waited for key inflation reports due later in the week.

Spot gold was down 0.6% at $4,402.86 an ounce at 0420 GMT, after falling 1% on Friday. US gold futures for December delivery also fell 0.6%, to $4,447.60.

Data released Friday showed US job growth accelerated sharply in August, while the unemployment rate held steady at 4.1%. The figures suggested an improving labor market after recent weakness and kept a rate increase at the Federal Reserve's September meeting on the table. Producer price data is due Thursday, followed by consumer price 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.

· Tim WatererThe KCM Trade analyst assessed the effect of US jobs data and upcoming inflation figures on gold.

"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. He said a strong inflation reading would strengthen expectations of a Fed hike, push yields higher and weigh further on gold.

The CME FedWatch tool showed traders pricing in a 58.4% chance of a rate hike at the Fed's Sept. 15-16 meeting. Gold often serves as an inflation hedge, but higher rates tend to reduce the appeal of non-yielding bullion. Silver fell 0.6% to $65.80 an ounce, platinum dropped 1.1% to $1,800.59 and palladium declined 0.5% to $1,394.

A strong inflation print would reinforce expectations of a Fed hike, lift yields further and weigh more heavily on gold.

· Tim WatererWaterer described how stronger inflation could affect interest-rate expectations and bullion prices.
About this summary

Originally published by Asharq Al-Awsat in English. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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