Key TakeawaysPrecious metal prices declined approximately 2% following August employment figures that revealed 162,000 new positions, substantially exceeding the anticipated 53,000Jobless rate remained unchanged at 4.1%, demonstrating continued labor market strengthFederal Reserve Governor Christopher Waller indicated potential support for maintaining current rates if inflation trends remain favorableTrading activity now reflects approximately even odds for a September rate increase, sliding from near 70% probability earlier in the weekTechnical barriers for gold emerge around the 200-day moving average near $4,526Gold experienced significant downward pressure Friday following the release of unexpectedly robust US employment figures, introducing fresh questions regarding the Federal Reserve’s upcoming policy decisions at its September gathering.Gold Dec 26 (GC=F)August employment figures revealed 162,000 new positions added to the American economy. Market forecasters had projected roughly 53,000 additions. The jobless rate remained stable at 4.1%. These numbers demonstrated a significant turnaround from July’s figures, which indicated a contraction of 23,000 positions.BREAKING: The US economy adds +162,000 jobs in August, well above expectations of +55,000.The unemployment rate was 4.1%, in-line with expectations of 4.1%.July's job number was also revised up by +43,000 jobs and is now positive for the month.The US job market nearly…— The Kobeissi Letter (@KobeissiLetter) September 4, 2026Spot market valuations for gold retreated approximately 2% to settle at $4,391.61 per ounce. Futures contracts declined 0.6% to reach $4,514.19. Silver experienced a 1.5% retreat, while platinum decreased 0.6%.The US Dollar Index climbed 0.2% to 99.03 in the wake of the employment announcement. Greenback strength typically pressures gold valuations, as foreign currency holders face elevated costs when purchasing the precious metal.Central Bank Commentary and Policy ExpectationsFederal Reserve Governor Christopher Waller indicated Thursday his willingness to advocate for maintaining current policy settings at the upcoming September 15-16 gathering, contingent upon forthcoming inflation metrics confirming sustained moderation in price growth.Waller refrained from completely dismissing the possibility of tightening. He emphasized that August’s inflation statistics would carry substantial weight in shaping his stance and acknowledged that renewed price acceleration could shift his preference toward a rate adjustment.Financial markets responded swiftly. September rate hike probability declined to approximately 50%, retreating from roughly 70% odds observed earlier during the week, based on CME FedWatch tool data.Fed rate-hike odds for September are now slightly favored, climbing to 52% after the stronger-than-expected jobs report. https://t.co/WBWgYyx5AV pic.twitter.com/TGijsM22kk— Wall St Engine (@wallstengine) September 4, 2026Reduced borrowing costs generally benefit gold valuations since the metal generates no yield, enhancing its appeal when returns on alternative investments decline.Gold had previously recovered nearly 2% during Thursday’s session, ending a three-day selloff. Friday’s employment release curtailed portions of that advance.Outlook for Precious MetalsNext week’s August consumer price index release has emerged as a critical determinant for the Fed’s ultimate policy choice. Market observers suggest inflation data may carry greater significance than employment figures in shaping whether officials opt to tighten or maintain current settings.Compensation growth reflected in Friday’s employment statistics remained relatively moderate, providing some underlying support for gold and preventing additional selling pressure.IG senior market analyst Tony Sycamore observed that gold’s recent recovery also benefited from diminishing pressure stemming from energy valuations and Treasury yields. He noted that recent Middle East tensions appear to have subsided, alleviating inflation concerns associated with elevated petroleum prices.Gold continues trading above the $3,942 trough established in late June. Sycamore suggested this level reinforces the interpretation that gold has established a medium-term foundation.The precious metal currently confronts technical obstacles near the 200-day moving average positioned around $4,526. Successfully penetrating that threshold would enhance near-term prospects. Inability to sustain levels above it may trigger renewed downside movement.The primary challenge awaiting gold arrives with next week’s inflation statistics.The post Gold Tumbles 2% as Strong Jobs Data Revives Fed Rate Hike Speculation appeared first on Blockonomi.