Gold prices moved lower on Monday (Sept. 7), with spot gold briefly falling to around US$4,389 per troy ounce after also declining on Friday. The main pressure came from much stronger-than-expected US labor market data. August Non-Farm Payrolls rose by 162,000, while the unemployment rate remained steady at 4.1%, prompting markets to once again increase expectations that the Federal Reserve still has room to raise interest rates at its September meeting.
From a fundamental perspective, gold remains caught between two opposing forces. On one side, the strong NFP report has strengthened the outlook for higher US interest rates, which tends to weigh on gold because higher borrowing costs increase the opportunity cost of holding non-yielding assets. Markets currently price the probability of a Fed rate hike in September at around 57%, while attention now shifts to the Producer Price Index on Thursday and the Consumer Price Index on Friday. If inflation comes in hotter than expected, expectations for a rate increase could strengthen further and put additional pressure on gold.
However, downside pressure on gold is being limited by rising geopolitical risks in the Middle East. Tensions between the US and Iran have intensified again after both sides exchanged attacks on vessels around the Gulf and the Strait of Hormuz. The developments have pushed Brent crude closer to US$97 per barrel and raised concerns over potential energy supply disruptions and renewed global inflationary pressures. Such geopolitical uncertainty continues to support safe-haven demand for gold, although higher oil prices may also reinforce inflation risks and give central banks more reason to maintain tighter monetary policy.
From a technical perspective, the US$4,400 area remains an important level to watch. As long as prices hold above the US$4,400–4,390 zone, the possibility of a rebound toward resistance at US$4,430–4,450 remains open. If buying momentum strengthens and gold manages to break above US$4,450, the next upside targets are seen around US$4,480 and US$4,500.
On the downside, if selling pressure pushes gold below US$4,390, the correction could extend toward the US$4,370–4,350 area. A deeper break below that zone may open the way toward US$4,320. With US markets closed for the Labor Day holiday, trading liquidity is expected to be thinner today, potentially keeping price action relatively contained, although sharp moves could still occur if fresh headlines emerge from the Middle East conflict.
Overall, gold retains a sideways-to-mildly bearish bias, pressured by the strong NFP report and rising expectations of a Federal Reserve rate hike. Nevertheless, geopolitical tensions and elevated oil prices continue to limit the downside. The next directional move in gold is likely to become clearer as markets begin positioning for the US PPI and CPI releases later this week. (mrv)
Source: Newsmaker.id
