Gold holds drop after US jobs data support rate-hike outlook

Bloomberg

Gold held its biggest decline in two weeks after strong US jobs growth tempered recession fears, suggesting that the Federal Reserve is likely to persist with steep interest-rate hikes to curb inflation.
Bullion dropped as much as 0.9% as US nonfarm payrolls jumped by more than double what economists
had forecast, diminishing prospects of an economic slowdown. That spurred gains in the dollar and Treasury yields, reducing the appeal of non-interest-bearing gold.
The data support the case for the Fed to raise its benchmark rate by 75 basis points next month, matching the moves it made in June and July. It also means the central bank may need to keep borrowing costs higher for longer to cool inflation, contrary to market expectations for rate cuts in 2023. The US consumer price index later this week will provide more clues on the likely path.
The precious metal has still rallied for the last three weeks, drawing haven support from fears of a global recession and heightened US-China tensions. Beijing has been conducting military drills in the air and seas surrounding Taiwan in the wake of House Speaker Nancy Pelosi’s trip there last week. Holdings of bullion in exchange-traded funds have remained under pressure, however, falling for an an eighth straight week.
Spot gold rises 0.1% to $1,776.66 an ounce by 9:13 am in London. The Bloomberg Dollar Spot Index edged lower. Silver and
palladium gained, while platinum was steady.