【TMGM Financial Recap】Strong Nonfarm Payroll Data Impacts Gold Prices; This Week's CPI And PPI Data Become A Life-Or-Death Crisis For Gold! - tmgm.com

AI desk brief

Stronger-than-expected US August payrolls knocked gold sharply lower, with spot gold at one point down more than 2% as the market repriced a higher probability of a Fed rate hike. NFP rose 162k versus 56k expected, unemployment held at 4.1%, and July was revised from a 23k decline to a 21k gain. The report pushed the implied odds of a September 15-16 hike up from roughly 50% before the release to about 58-65%, while two-year Treasury yields rose to their highest since January 2025 and the dollar firmed.

The piece argues that gold’s selloff was driven by the classic mix of a stronger USD, higher real-rate expectations, and rotation away from safe havens. Wage growth did cool to 3.1% y/y from 3.2%, which leaves some room for the inflation narrative to soften, but the labor data was clearly the dominant driver. The article also flags renewed US-Iran tensions in the Strait of Hormuz as a countervailing geopolitical support factor for bullion.

Near term, Thursday’s PPI and Friday’s CPI are the main catalysts. Consensus expects core CPI to ease to 2.4% y/y from 2.5%, and a softer print would likely ease rate-hike pressure and stabilize gold. A hotter inflation outcome would reinforce higher-yield expectations and could trigger another leg lower in bullion; the market is effectively in a data-versus-geopolitics tug-of-war until those releases land.