Gold eases as robust U.S. payrolls boost rate-hike bets; inflation data in focus - CNBC

AI desk brief

Gold edged lower as a stronger-than-expected U.S. August payrolls report kept September Fed hike bets alive and pushed the market to focus on this week’s PPI/CPI prints. Spot gold was down 0.5% at $4,405.47/oz and December gold futures fell 0.5% to $4,452.20, after a 1% drop on Friday. Traders now price a 58.4% chance of a rate hike at the Sept. 15-16 FOMC meeting, with higher yields and a firmer dollar the immediate headwinds.

The jobs data showed sharper payroll growth and unemployment steady at 4.1%, reinforcing the view that the labor market is cooling less than previously feared. KCM Trade’s Tim Waterer said the payroll surprise pressured gold, but CPI is the key missing piece; a strong inflation reading would bolster hike expectations, lift yields further and weigh more heavily on bullion. Gold’s traditional inflation-hedge role is being offset in the near term by the opportunity cost of holding non-yielding metal.

Near-term direction now hinges on Thursday PPI and Friday CPI, which could either validate the current hike pricing or force a repricing if inflation softens. Geopolitical risk from the Middle East remains a secondary support, but macro rates are dominating price action. Silver, platinum and palladium also softened, with spot silver down 0.2%, platinum off 0.8% and palladium down 0.7%, pointing to broad pressure across the precious-metals complex.