Market Overview
At 15:02 ET (19:02 GMT) spot gold slipped 0.7% to $4,375.66 per ounce, while gold futures fell 1.3% to $4,419.64 per ounce, extending modest weekly declines. The downward pressure stemmed from heightened expectations of a Federal Reserve quarter‑point rate hike later this month, which lifted the odds of a hike to roughly 60% on the CME FedWatch tool, outweighing the modest support from a weaker U.S. dollar.
Oil Market Dynamics and Geopolitical Tension
Brent crude futures edged up 0.1% to $97.13 a barrel, after earlier touching $99.45 a barrel. The contract posted a 9.3% weekly gain following the first U.S.–Iran military strikes since July. U.S. Central Command reported that on Saturday it struck three Iranian crude‑oil carriers in retaliation for alleged IRGC missile attacks on two U.S. Navy warships. Iran’s state media said Tehran responded on Sunday by targeting six vessels in the Strait of Hormuz and the Persian Gulf, including three tankers and three U.S. ships. Iranian officials Mohsen Rezaee warned of a “clear warning” to Washington, while Speaker Mohammad Bagher Ghalibaf emphasized the vulnerability of U.S. oil and gas assets in the region. Additional drone and missile attacks were reported on Saudi Aramco’s 400,000‑barrel‑per‑day Jazan refinery, further heightening supply‑disruption concerns.
U.S. Labor Market and Inflation Outlook
The U.S. Bureau of Labor Statistics released a blockbuster August jobs report, showing 162,000 non‑farm payrolls added—nearly three times the 55,000 forecast—and the unemployment rate unchanged at 4.1%. Revisions added a combined 55,000 jobs for June and July. The robust labor market, coupled with persistent inflation, reinforced expectations of further monetary tightening. Fed Chair Kevin Warsh delivered a hawkish speech at Jackson Hole, while FOMC voting members John Williams (President, New York Fed) and Governor Christopher Waller offered more dovish commentary the previous week.
Upcoming Inflation Data
Market participants will watch the August Producer Price Index (PPI) and Consumer Price Index (CPI) releases scheduled for Thursday and Friday. Analysts anticipate the CPI to hold at 3.4%, matching July, with September likely to remain in the high‑3% range unless West Texas Intermediate crude falls below $90 per barrel. Senior Interactive Brokers economist José Torres noted that a sustained rise in oil prices could compel the Fed to raise rates, as core inflation would need to settle in the low‑2% range before easing.
China’s Gold Purchases
Data indicated that the People’s Bank of China accelerated its gold buying in August, reaching the highest monthly acquisition level since 2023, even as global bullion prices rose.
Contributors
The article was contributed by Vahid Karaahmetovic, Roushni Nair, and Jaiveer Shekhawat.