Gold declines to near $4,400 as robust US jobs data lifts Fed hike odds
Gold price (XAU/USD) drifts lower to near $4,410 during the early Asian session on Tuesday. The precious metal extends the decline as a stronger-than-expected US Nonfarm Payrolls (NFP) report for August bolsters expectations for a Federal Reserve (Fed) interest rate hike this month.
Gold prices slipped to near $4,410 early Tuesday, following the release of strong U.S. jobs data that boosted expectations for a Federal Reserve interest rate increase later this month. The U.S. Nonfarm Payrolls report for August showed an addition of 162,000 jobs, surpassing the upwardly revised 21,000 and exceeding market predictions of 56,000.
The unemployment rate remained stable at 4.1%. This data has elevated the odds of a Fed rate hike to 60% at their upcoming policy meeting, up from 50% before the jobs announcement, according to the CME FedWatch tool. Commodity experts, like Saxo Bank's Ole Hansen, anticipate a shift in market sentiment towards a more "structural conviction" in gold, driven by diverse market participants.
Analysts at UOB Group caution that near-term price movements for gold remain volatile, with the metal trading between the 100-day and 20-day Simple Moving Averages. The Bollinger Bands indicate a mid-range consolidation period, with the price holding above the lower band and nearing the upper band.
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