WASHINGTON (dpa-AFX) - Gold prices have slumped on Friday, partially offsetting the two previous sessions of gains as the nonfarm payroll numbers released by the U.S. Labor Department today showed a strong labor market, renewing expectations of an interest rate increase in the U.S.
Front Month Comex Gold for October month delivery has tumbled by $53.80 (or 1.19%) to $4,451.10 per troy ounce.
Front Month Comex Silver for October month delivery has also slumped by $0.984 (or 1.47%) to $66.180 per troy ounce.
On the economic front today, the U.S. Bureau of Labor Statistics released the latest U.S. nonfarm payrolls report which exceeded expectations.
The economy added 162,000 jobs in August following an upwardly revised 23,000 rise in July and much higher than market expectations of 56,000. Further, the change in total nonfarm payroll employment for June and July was revised, up by a combined 55,000.
The unemployment rate remained unchanged at 4.10% in August, in line with market expectations. The number of unemployed increased by 115,000 to 7,030,000 while total employment surged by 569,000 to 162,750,000.
In the manufacturing sector, there was an upward trend showing an increase of 16,000.
Despite the challenges due to the ongoing Middle East war, higher oil prices, and the global uncertainty surrounding trade relations with the U.S. due to tariffs, these numbers prove that the U.S. economy is gaining momentum.
The surge in payroll figures could prompt the U.S. Federal Reserve to tighten its monetary policy and make the U.S. dollar pricey for overseas buyers of gold.
In addition to this, investors are now anticipating the inflation numbers coming up next week to get more clarity on the economic outlook.
Before the U.S. Federal Reserve's next meeting, the only major inflation reports to be released are the Consumer Price Index and the Producer Price Index by the U.S. Bureau of Labor Statistics.
Late yesterday, the bets for quarter-point interest rate hikes hovered around 52.40% following comments by Federal Reserve Governor Christopher Waller.
Waller expressed inclination to keep the rates unchanged in the absence of any inflation shocks from next week's data releases.
According to the CME Group's FedWatch Tool, investors are currently betting on a 58.20% chance of a 25-basis-point interest rate-hike at the upcoming meeting of the U.S. Federal Reserve on September 15-16 while the odds on rates being held at the current level stand at 41.80%.
Today, the U.S. dollar index was last seen trading at 99.11, up by 0.15 (or 0.15%) today.
U.S. Vice President JD Vance stated that the ongoing U.S.-Iran conflict is not a war since there is no active shooting. Vance added that the U.S. already destroyed Iran's nuclear installations through its Operation Midnight Hammer in 2025 and later through Operation Epic Fury which began this February.
However, Vance refused to offer any timeline on when the conflict could end and stressed that the responsibility to end it lies with Iran.
Aiming to disable Iran from carrying out any strikes against vessels passing through the Strait of Hormuz, last weekend, U.S. forces began strikes on Iran, which prompted retaliation from Iran.
Soon after, U.S. forces conducted another round of attacks on Iran and Iran launched counter-strikes targeting the U.S. bases in the gulf.
The gulf crisis has resulted in the indefinite closure of the Strait of Hormuz.
Global major economies are struggling to the combat inflationary pressure on a long-term basis. Central banks are forced to either hold their interest rates or hike as needed.
According to a new World Gold Council's data, gold buying by central banks fell by more than half in July even as the yellow metal stayed near record highs. Net official-sector purchases dropped 54% to 23 tonnes from 51 tonnes in June.
In its outlook, the WGC stated that investment is expected to be the principal source of gold-demand growth through the rest of 2026.
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