Gold prices dropped to a four-month low this morning amid growing concerns that the Federal Reserve could hike interest rates sooner than expected.
As of 8:30, the yellow metal was hovering at $1,747.93 an ounce, just below the crucial $1,750 level, having staged a slight rally today.
At one point, it fell as low as $1,684 an ounce as investors fled the asset. Over the last month, however, prices have dropped nearly 5.0 per cent overall.
The latest fall was triggered by a better-than-expected jobs report from the US Labor Department, which showed that employers hired the most workers in nearly a year in July and continued to raise wages.
However, this has increased concerns that emergency stimulus measures put in place during the pandemic could be rolled back ahead of time.
Despite the downward pressure, prices are still getting some support from the combination of Chinese inflation and Joe Biden’s $1 trillion infrastructure plan.
Traders’ attention will now turn to this week’s CPI inflation data. Stephen Innes, managing partner at SPI Asset Management, said that a strong inflation number could increase the probability of an early interest rate hike.