Key Takeaways:
Spot gold fell 0.5 percent to $4,405.47 an ounce Monday as strong August jobs data kept a September Federal Reserve rate hike on the table.
"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," Tim Waterer, chief market analyst at KCM Trade, said.
U.S. employers added 162,000 jobs in August, nearly triple the 56,000 forecast, while the unemployment rate held at 4.1 percent. Traders now price a 58.4 percent chance of a rate increase at the Fed's Sept. 15-16 meeting, up from 49 percent before the data, according to CME's FedWatch tool. U.S. gold futures for December delivery fell 0.5 percent to $4,452.20.
The metal's near-term direction hinges on U.S. producer price index data Thursday and consumer price index data Friday. A hot inflation print would reinforce rate-hike expectations, lift yields further and weigh more heavily on gold, while softer figures could offer relief.
WTI Near $90 Reinforces Tightening Case
West Texas Intermediate crude trades near $90 a barrel, close to its highest level since July, after the U.S. military struck three Iranian oil tankers Saturday in response to Iranian ballistic missile attacks on two U.S. Navy ships. Brent crude climbed to around $97 a barrel. Elevated energy prices strengthen the case for keeping interest rates higher for longer at a time when bond yields in major economies already sit near multi-year highs, raising the opportunity cost of holding non-yielding bullion.
The dollar's weakness has limited gold's downside. The U.S. Dollar Index trades around 98.95, down nearly 0.2 percent on the day, as broad yen strength outweighs support from hawkish Fed expectations. USD/JPY trades near 154.50, down about 3.3 percent since the start of the month.
On the daily chart, spot gold holds above the 100-day simple moving average at $4,349 and the lower Bollinger band near $4,258, keeping the near-term bias bearish but not disorderly. The relative strength index sits flat around 50. Initial support is seen at the 100-day SMA, followed by the lower Bollinger band before a more significant horizontal floor at $4,000. Buyers would need to lift XAU/USD back above the Bollinger mid-line near $4,466 to ease selling pressure.
Among other precious metals, spot silver eased 0.2 percent to $66.03 an ounce, platinum lost 0.8 percent to $1,805.53 and palladium declined 0.7 percent to $1,396.08.
Perth Mint reported August gold product sales fell to a three-month low of about 24,000 ounces, down roughly 22 percent from July and 21 percent lower year-over-year, even as spot gold posted a monthly gain of about 10 percent in August. Silver sales dropped more than 31 percent from July to about 334,000 ounces.
This article is for informational purposes only and does not constitute investment advice.
