WASHINGTON (dpa-AFX) - Gold prices have moved lower on Tuesday, adding to the losses from last Friday's session, as traders raised their bets on a possible increase in U.S. interest rates following last week's strong jobs numbers and the ongoing U.S.-Iran re-escalation that continues to trigger oil-linked inflationary concerns.
Front Month Comex Gold for October delivery has slid by $34.40 (or 0.77%) to $4,407.50 per troy ounce. Of note, markets remained closed on Monday on account of Labor Day.
However, front Month Comex Silver for October delivery has advanced by $0.328 (or 0.50%) to $66.550 per troy ounce.
Last Friday, the latest U.S. nonfarm payrolls report released by the U.S. Bureau of Labor Statistics revealed that the economy added 162,000 jobs in August, much higher than market expectations of 56,000.
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.
The surge in payroll figures boosted expectations on possible monetary policy tightening by the U.S. Federal Reserve.
A higher interest rate regime in the U.S. makes the U.S. dollar pricey for overseas buyers of gold.
Currently, investors are betting on a 60.40% 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 39.60%, according to the CME Group's FedWatch Tool.
Following the NFP data release, U.S. President Donald Trump threatened through Truth Social that he will stop U.S. trade with countries with which the U.S. has a huge deficit unless the Federal Reserve lowers interest rates.
Earlier in the past week, U.S. Vice President JD Vance stated that he felt that the Fed should be lowering interest rates.
With the U.S. Federal Reserve's meeting only a week away, investors are awaiting the Consumer Price Index and the Producer Price Index to be released over this week to assess whether the Fed will hike or hold the interest rates.
In the Middle East, so far no sign of an agreement between the U.S. and Iran has emerged, keeping war concerns alive.
In retaliation to an attack on two U.S. Navy warships by Iran's Islamic Revolutionary Guards Corps, on Saturday, U.S. Central Command stated that it hit three Iranian crude oil tankers, (namely, M/T Downy, M/T Stark, and M/T Kylo) permanently disabling them.
The Chief Admiral of CENTCOM Brad Cooper stated that U.S. forces would impose higher economic costs on Iran if the IRGC attempts to shoot U.S. vessels.
As of September 6, CENTCOM announced that U.S. forces have redirected nearly 94 commercial vessels, disabled three, and boarded two to enforce the blockade against Iran.
Brushing aside the U.S. threats, Iran's President Masoud Pezeshkian stressed that Iran will continue its resistance until the aggressors regret.
Citing Kpler's data, Reuters reported that the number of commodity vessels sailing through the Strait of Hormuz was seven on Monday, compared to eight on Sunday.
Today, Qatar stated that the present 'no war, no peace' situation prevailing in the gulf is unacceptable and urged both nations to resolve all disputes through dialogue and reopen the Strait of Hormuz quickly without any preconditions.
The United Nations Conference on Trade and Development remarked that the ongoing disruption in the critical Strait of Hormuz seaway could push small-sized and medium-sized businesses out of global supply chains, weakening the international trade.
On the economic front in the U.S., data released by the National Federation of Independent Business revealed that the Small Business Optimism index fell to 98.70 in August from 99.80 in July, below forecasts of 99.30.
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