Gold's recent sell-off masks a genuinely two-sided setup heading into this week's inflation prints. A stronger-than-expected August jobs report has kept the odds of a September rate hike firmly in play — a dynamic that typically weighs on non-yielding bullion given the higher opportunity cost of holding it. Yet gold has held its ground rather than selling off further, suggesting the market views this week's CPI and PPI data as the more decisive catalyst.

Gold is trading a little lower on Monday as markets await key US inflation data due later this week for further clues on the Federal Reserve's interest rate path. Friday's data showed US job growth accelerated sharply in August while the unemployment rate held steady at around 4.1%, suggesting an improvement in the labour market after recent struggles and keeping a rate increase this month firmly on the table. Gold slipped after the report, though it has since stabilised.

Traders are pricing in around a 60% chance of a rate hike at the Fed's 15-16 September meeting, according to CME's FedWatch tool. While gold is typically viewed as an inflation hedge, higher interest rates tend to weigh on the appeal of non-yielding bullion — both by lifting the returns available on interest-bearing alternatives and by supporting the US dollar, which usually moves inversely with gold — and the US consumer and producer inflation reports due this week are likely to be the more decisive input for how that calculation shifts. The CPI reading in particular is among the most closely watched inputs the Fed cites in setting policy, which is why gold often trades on a tighter range into the release.

Adding a further wrinkle, President Donald Trump said on Friday that unless the Fed cuts interest rates, he would stop trading with countries with which the United States runs a deficit. The comments are the latest instance of public pressure on the central bank, an uneasy backdrop for a Fed that is weighing whether further tightening is warranted just as the White House pushes in the opposite direction.

Away from the macro backdrop, Perth Mint reported that its gold product sales hit a three-month low in August, while silver sales slipped more than 31% from July. Sales of gold coins and minted bars totalled around 24,000 ounces, down roughly 22% from July and close to 21% lower than a year earlier. Silver sales fell to around 334,000 ounces, down from about 486,000 ounces in July and more than 21% lower year-on-year.

Neil Vance, Perth Mint's general manager for distributors and product development, said new silver releases performed strongly during the month, with the 10kg silver bullion horse proving popular with customers and a large share of the Brumby mintage also selling.

The sales slowdown came despite a strong month for prices, with spot gold posting a monthly gain of around 10% in August while silver rose more than 15%, underscoring a gap between the investment demand driving prices higher and softer physical retail demand at the mint level. Mint-level retail figures are one of the few regularly published windows on physical bullion buying, so the divergence offers a useful counterpoint to price action that has been driven more by broader investment flows. For AUD-linked exposure, this points to some retail demand fatigue locally even as global investment flows stayed strong enough to drive that price gain — a divergence worth watching if the inflation data pushes gold sharply in either direction this week.

Perth Mint, owned by the government of Western Australia, is the world's leading producer of newly mined gold and Australia's largest refiner by volume.