Spot gold fell 0.4% to $4,385.85 per ounce by 2:16 p.m. ET, after trading as high as $4,442.70 earlier in the session, while U.S. gold futures for December delivery dropped 1% to $4,431.00.
“Gold is range-bound because it is capped by a higher probability of raising interest rates, which continues to hinder momentum in the market,” said Daniel Pavilonis, senior market strategist at Stone X.
Oil prices touched multi-week highs after Yemen’s Tehran-backed Houthis attacked Saudi energy facilities and Tehran threatened the United States with “economic warfare.”
Brent crude neared the $100-per-barrel mark, touching $99.46, its highest level since July 24, fueling inflation worries.
The market continues to absorb the stronger-than-expected U.S. jobs report and await upcoming CPI and PPI data, while higher oil prices are stoking inflation concerns and supporting expectations for a September rate hike, said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Spot gold fell as much as 2.4% on Friday after data showed U.S. job growth accelerated sharply in August while the unemployment rate held steady at 4.1%, reinforcing signs of resilience in the labor market.
Traders are now pricing in about a 60% chance of an interest rate hike at the central bank’s policy meeting, according to the CME FedWatch Tool, up from about 50% before the data.
The U.S. producer price index data is due on Thursday and consumer price index figures on Friday.
Although gold is often viewed as a safeguard against inflation, rising interest rates tend to diminish the non-yielding metal’s appeal.
Among other metals, silver edged 0.2% higher to $66.30 per ounce, platinum rose 1% to $1,844.58 and palladium slid 2.6% to $1,351.75.