Gold prices (XAU/USD) declined to near $4,410 during the early Asian session on Tuesday, extending losses after a stronger-than-expected US Nonfarm Payrolls (NFP) report for August increased expectations for a Federal Reserve interest rate hike this month [1]. The US NFP climbed by 162,000 in August, significantly higher than the market consensus of 56,000 and an upwardly revised prior figure of 21,000. The US Unemployment Rate remained steady at 4.1% during the same period [1].
Following the jobs data released on Friday, traders now see a 60% probability of a Fed rate hike at the upcoming policy meeting, up from 50% before the report, according to the CME FedWatch tool [1]. Ole Hansen, head of commodity strategy at Saxo Bank, noted that gold and silver have moved in the opposite direction to energy prices, with declines reinforced by rising bond yields and expectations of a Fed rate hike on September 16 [1].
Market participants are awaiting US Producer Price Index (PPI) and Consumer Price Index (CPI) inflation data later this week. Signs of hotter inflation would further support the case for a September rate hike, potentially strengthening the US Dollar and weighing on USD-denominated commodities like gold. Conversely, cooler inflation readings could bolster the case for a rate hold and weaken the Greenback [1].
Despite the recent pullback, analysts at Societe Generale argue that gold has entered a new phase of its 2026 bull run, characterized by broad-based, structural conviction across all market participants, evolving from an initial geopolitical shock to a durable build-up of exposure in physical, futures, and options markets [1]. UOB Group strategists highlight that gold fell more than 0.9% last Friday to $4,429.98/oz for a weekly loss, as stronger US jobs data dented the appeal of non-yielding bullion [1]. Technical analysis shows gold retaining a neutral tone in the near term, with XAU/USD supported by the 100-day SMA but capped by the 20-day SMA, and the Relative Strength Index (14) at 51 indicating mid-range consolidation [1].
CONCLUSION
Gold prices have declined following robust US jobs data, which has increased expectations for a Fed rate hike in September. While near-term price action remains sensitive to macroeconomic data, analysts see a deeper structural bull run developing for gold. Market participants are closely watching upcoming US inflation data for further cues on Fed policy and gold's direction.