Gold Falls 1% as Dollar Strengthens, Profit-Taking Emerges

Gold prices fell below $4,150 per ounce during the American session on Monday after briefly topping $4,200 in Asian trading, as a stronger US dollar and profit-taking limited gains following last week's rebound. Weaker-than-expected US nonfarm payrolls reduced expectations of an immediate Federal Reserve rate increase, while easing oil-driven inflation pressures supported hopes that policymakers may avoid faster policy tightening. "Softer payrolls prompted a rethink of the strong-dollar narrative and triggered a modest decline in bond yields, removing some of the pressure that had weighed heavily on bullion during its prolonged correction," wrote Ole Hansen, head of commodity strategy at Saxo Bank, in a Monday note. Markets still expect restrictive monetary policy until inflation slows further, with traders assigning a 56% chance of a September rate increase, while uncertainty over US-Iran negotiations and the Strait of Hormuz supported the dollar. The US Dollar Index rose 0.20% to about 101.07, weighing on gold prices, as investors awaited the ADP employment report, Federal Open Market Committee minutes, and weekly jobless claims for policy signals. At the time of writing,.