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

Gold prices dipped on Monday as robust U.S. payrolls data bolstered the odds of higher interest rates. Market participants were awaiting key U.S. inflation figures for further insight into the Federal Reserve's policy direction. Spot gold fell 0.5% to $4,405.47 per ounce, following a 1% decrease on Friday. U.S. gold futures for December delivery also declined 0.5% to $4,452.20.

On Friday, U.S. data revealed a sharp acceleration in job growth in August, with the unemployment rate remaining steady at 4.1%, indicating a strengthening labor market and hinting at a potential rate hike this month. U.S. producer price index data will be released on Thursday, followed by consumer price index data on Friday. Tim Waterer, chief market analyst at KCM Trade, noted that while the jobs number provided a clear upside surprise and pressured the metal, a strong inflation print this week would further solidify expectations of a Fed hike and weigh more heavily on gold.

Currently, traders price a 58.4% chance of a rate increase at the Fed's September 15-16 meeting. Although gold is traditionally considered an inflation hedge, rising interest rates tend to diminish its appeal. Meanwhile, U.S. President Donald Trump suggested he would stop trading with deficit countries if the Fed fails to cut interest rates.

In the Middle East, Iran pledged to address issues stemming from U.S. sanctions that are severely impacting its economy, while a senior Iranian official warned of a "painful response" in the event of further attacks. Spot silver slipped 0.2% to $66.03 per ounce, platinum fell 0.8% to $1,805.53, and palladium declined 0.7% to $1,396.08.