Gold Slides as Strong US Data Boosts Fed Rate Hike Bets
Gold | 2026-09-08 05:48:16
The LBMA Gold Price PM dropped 3.2% to $4,415 per ounce, cutting its year-to-date advance to about 1%.
By Paul Ploumis
SEATTLE (Scrap Monster): Gold prices faced renewed pressure last week as stronger-than-expected US economic figures increased expectations for tighter monetary policy. Investor sentiment was also driven by rising Treasury yields, geopolitical tensions, and shifting currency movements.
US employment and business activity remained firm, strengthening speculation that the U.S. Federal Reserve could raise interest rates by 25 basis points at its September meeting. Friday’s stronger jobs report reinforced that view. Investors now await US August inflation data, which could provide another important signal for the Fed.
The LBMA Gold Price PM dropped 3.2% to $4,415 per ounce, cutting its year-to-date advance to about 1%. Earlier in the week, hawkish comments from Kevin Warsh at Jackson Hole had led to a dip in gold prices. However, a weaker US dollar and increased global gold ETF demand helped limit the decline.
Gold remains below its 200-day moving average near $4,534 an ounce. A move above this level could improve the short-term outlook, with resistance around $4,696 and then $4,769-$4,774. On the downside, the rising 55-day average near $4,225 is considered important support.
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Frequently Asked Questions
- Why did gold prices decline last week?
Gold came under renewed pressure as stronger-than-expected US economic data increased expectations for tighter monetary policy. Firm employment and business activity, along with rising Treasury yields and hawkish Federal Reserve expectations, reduced the appeal of non-yielding gold.
- What could the September Federal Reserve meeting mean for gold?
Markets are increasingly focused on the possibility of a 25-basis-point interest-rate increase at the September meeting. Higher interest rates generally increase the opportunity cost of holding gold, potentially creating additional downward pressure on bullion prices. The upcoming US August inflation data could influence the Fed's decision and the near-term direction of gold.
- How much did gold prices fall, and what limited the decline?
The LBMA Gold Price PM declined 3.2% to $4,415 per ounce, leaving gold with a year-to-date gain of roughly 1%. The decline could have been deeper, but a weaker US dollar and increased global gold ETF demand helped cushion selling pressure.