FX.co ★ Gold Holds Drop on Fed Rate Hike Bets

Gold hovered near $4,400 an ounce on Monday after falling about 1% in the previous session, weighed down by rising expectations of an imminent Federal Reserve interest rate hike following stronger-than-expected US labor data last week. Data released on Friday showed that US nonfarm payrolls increased by 162,000 in August, after an upwardly revised gain of 23,000 in July, far exceeding market forecasts for a 56,000 increase. Meanwhile, the unemployment rate held steady at 4.1%, and annual wage growth eased to 3.1%, though the slowdown was less pronounced than economists had anticipated. In response, markets raised the implied probability of a September Fed rate hike to about 60%, up from roughly 50% before the data. Gold prices also remained under pressure from higher oil costs, as the US and Iran exchanged strikes on ships over the weekend, heightening concerns about renewed inflationary pressures.