Gold prices fell heading into the weekend and were on track for a weekly loss after a stronger-than-expected US jobs report increased the odds that the Federal Reserve could raise interest rates as early as this month, reducing the appeal of non-yielding bullion.

Spot gold dropped 1.2% to $4,419.09 an ounce by 1:49 p.m. EDT on Friday, according to Reuters. In the immediate aftermath of the jobs data, bullion fell more sharply, touching an intraday low of $4,364.99 an ounce — a decline of more than 2%. US gold futures for December delivery also slipped, settling 1.4% lower at $4,476.60 an ounce.

Why the Jobs Report Moved Gold

The catalyst was the US Bureau of Labor Statistics’ August employment report, which showed job growth accelerating sharply while the unemployment rate held steady at 4.1%. Reuters reported that the data pointed to a labor market that remains stable overall, but the strength of the headline number was enough to put a Fed rate hike this month firmly back on the table.

Independent analyst Tai Wong, quoted in the Reuters report, said the strong report makes a September hike considerably more likely, barring a weak inflation reading before then.

Short-term interest rate futures now imply roughly a 65% probability of a rate increase at the Fed’s September 15–16 meeting, up from about 55% before the jobs data was released, per Reuters.

Attention now turns to next week’s US consumer and producer price inflation reports, which markets expect to offer further clues on the Fed’s next move. Han Tan, chief market analyst at Bybit, noted to Reuters that the jobs report follows a hawkish Jackson Hole speech from Fed Chair Warsh and appears to widen the door further for a hike this month, adding that next week’s inflation prints could still trigger significant swings in gold given the central bank’s focus on price stability.

Compounding the pressure on gold, the US dollar strengthened following the jobs report, making dollar-priced bullion more expensive for buyers holding other currencies.

Other Metals Also Under Pressure

Gold’s decline was mirrored across the wider precious metals complex, with Reuters reporting that all three of the following were on pace for weekly losses:

• Silver fell 1.7% to $65.83 an ounce
• Platinum slipped 0.8% to $1,810.96 an ounce
• Palladium dropped 2.5% to $1,385.50 an ounce

The Bigger Picture

The move underscores how sensitive gold remains to shifting expectations around Fed policy. A hawkish surprise in the labor market — even one that leaves unemployment unchanged — can quickly erode gold’s appeal, since higher interest rates raise the opportunity cost of holding an asset that pays no yield. With markets now pricing in a meaningfully higher chance of a September hike, the coming week’s inflation data is likely to be the next major swing factor for bullion prices heading into the Fed’s mid-September meeting.