Gold has fallen below a key price level as fresh economic data puts pressure on the precious metal, with a strong U.S. jobs report leading traders to raise their bets that the Federal Reserve will hike interest rates later this month.

Spot gold fell 0.7% to $4,398.89 an ounce on Monday, while gold futures also dropped 0.7% to $4,444.11. The metal had already lost 1% on Friday before slipping further at the start of the week.

The decline followed a U.S. Labor Department report showing that employers added 162,000 jobs in August, topping analyst forecasts, while the unemployment rate held steady. A strong labor market gives the Federal Reserve more room to raise interest rates, and higher rates tend to hurt gold because they make other assets, such as bonds, more attractive by comparison. That dynamic is especially pronounced for gold, which pays no interest or dividend, so rising yields raise the opportunity cost of holding the metal.

Rate Hike Bets Rise

Markets are now pricing in roughly a 60% chance of a 25 basis point rate hike at the Fed's September 15-16 meeting, up from lower odds before Friday's jobs data was released.

Rate hike odds surge to 67%, back to post-Jackson Hole highs pic.twitter.com/CR2TXXnasq

— zerohedge (@zerohedge) September 4, 2026

Analysts at ING noted in a client note that the expected rate hike should give some temporary support to the dollar, particularly against low-yielding currencies. A stronger dollar adds pressure on gold: because gold is priced in dollars, a rising greenback makes the metal more expensive for buyers using other currencies.

Earlier in the week, private payroll firm ADP reported only 38,000 new jobs in August, well below expectations. That softer reading had briefly helped gold snap a three-session losing streak on September 2, with front-month gold rising 0.4% to $4,366.30 and silver edging up 0.2% to $64.72 an ounce, before the stronger official payrolls report reversed the mood. The divergence between the two employment reports is a reminder that ADP's private-sector figures and the government's broader payroll survey do not always move in lockstep, and markets tend to weight the official data more heavily in setting rate expectations.

Oil and Inflation Add to Pressure

Oil prices are also in focus. Iran said it targeted three oil tankers in the Strait of Hormuz, along with other vessels linked to the United States, in response to American attacks on ships over the weekend. Brent crude was trading near $97 a barrel. Higher energy prices can feed into broader inflation, which may push the Fed to keep rates higher for longer. The Strait of Hormuz is one of the world's most important chokepoints for seaborne oil trade, which is why shipping incidents there tend to ripple quickly through crude prices.

Gold has stayed in a relatively tight range since bouncing off a floor near $4,000 in July. Last week, the metal fell below its 200-day moving average near $4,526, causing some short-term technical damage.

The next major price tests come later this week. U.S. producer price data is due Thursday, followed by consumer price data on Friday. Strong inflation readings could push rate hike bets even higher and add further pressure on gold.