Gold eases as robust US payrolls boost rate-hike bets; inflation data in focus

Gold prices slipped on Monday as impressive U.S. employment figures bolstered forecasts for interest rate hikes, leaving investors eagerly awaiting crucial U.S. inflation figures this week to clarify the Federal Reserve's policy direction. Spot gold fell 0.5% to $4,405.47 per ounce, down from a 1% decline on Friday. U.S. gold futures for December delivery also dropped 0.5% to $4,452.20.

Last Friday, U.S. job growth picked up significantly in August while the unemployment rate remained unchanged at 4.1%, indicating a healthier labor market following recent challenges and suggesting a possibility of a rate increase this month. U.S. producer price index data is expected on Thursday, followed by the consumer price index (CPI) 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," said Tim Waterer, chief market analyst at KCM Trade. "A strong inflation print would reinforce expectations of a Fed hike, lift yields further and weigh more heavily on gold."

Forecasts now stand at a 58.4% chance of a rate hike at the Federal Reserve's September 15-16 meeting, as indicated by CME's FedWatch tool. Typically seen as a safeguard against inflation, higher interest rates tend to make gold less attractive. On the international front, Iran pledged to intensify efforts to address the issues caused by U.S. sanctions, crippling its economy, while a senior Iranian official warned of a "painful response" if further attacked.

In other commodities, spot silver declined 0.2% to $66.03 per ounce, platinum fell 0.8% to $1,805.53, and palladium slipped 0.7% to $1,396.08.