Gold Prices Plunge 1% as US Job Growth Surpasses Expectations
Gold prices tumbled after United States employment data came in stronger than anticipated. This data has increased expectations that the Federal Reserve (the Fed) may raise interest rates as early as this month, thereby reducing the attractiveness of gold bullion, which provides no yield.
According to Refinitiv, gold prices in the final trading session of the week, Friday (4/9/2026), closed at US$ 4,427.7 per troy ounce, representing a 1% drop. This decline breaks the positive trend for gold, which had previously strengthened for two consecutive days with a 3.3% gain.
Over the course of the week, gold prices also fell by 0.56%, marking the second consecutive week of declines.
US job growth surged in August, while the unemployment rate remained steady at 4.1%. The US economy recorded the addition of 162,000 jobs in August 2026, marking the largest employment growth in five months. This figure follows a revised increase of 23,000 jobs in July, significantly exceeding market expectations of only 56,000 jobs.
The data indicates that the labour market remains relatively stable, leaving the option for a Fed interest rate hike this month on the table.
“Gold experienced a sharp decline because the very strong key figures and the overall solid report make a September rate hike much more likely, unless we receive weak CPI data,” said Tai Wong, an independent analyst, as quoted from Refinitiv.
Short-term interest rate futures now indicate approximately a 65% probability of a US policy rate hike at the Fed meeting on 15-16 September, up from around 55% before the US Bureau of Labor Statistics report was released.
Market attention has now shifted to US consumer and producer inflation data, which will be released next week. This data could provide further clues regarding the direction of the Fed’s monetary policy.
“This latest employment report comes following Chair Warsh’s hawkish speech at Jackson Hole and appears to further open the possibility for the Fed to realise its inclination towards raising interest rates, perhaps even this month,” said Han Tan, head market analyst at Bybit.
“With the mandate to maintain price stability remaining a primary concern for policymakers, next week’s US CPI data could still trigger even larger movements in precious metals,” Han added.
Meanwhile, the US dollar strengthened sharply following the release of the report. The strengthening dollar makes gold, which is priced in US dollars, more expensive for holders of other currencies.