As market participants awaited important U.S. inflation prints due later this week for additional clarity on the Federal Reserve’s policy path, good U.S. jobs data bolstered expectations for higher interest rates, causing gold prices to slightly decline on Monday.

After declining 1% on Friday, spot gold was down 0.5% at $4,405.47 per ounce as of 0211 GMT.

At $4,452.20, U.S. gold futures for December delivery were down 0.5%.

According to data released on Friday, U.S. job growth surged significantly in August while the unemployment rate remained stable at 4.1%. This suggests that the labor market is improving after recent difficulties and that a rate increase this month is still possible.

The consumer price index (CPI) and producer price index (PPI) for the United States are due on Friday and Thursday, respectively.Although the jobs report was a definite positive surprise and put some pressure on the metal, a September rate hike was not a given. According to Tim Waterer, chief market analyst at KCM Trade, “the real missing piece of the puzzle arrives this week with U.S. CPI.”A high inflation report would increase the likelihood of a Fed move, raise rates even more, and put further pressure on gold.

According to CME’s FedWatch tool, traders are pricing in a 58.4% chance of a rate hike at the Fed’s September 15–16 meeting.

Higher interest rates tend to make non-yielding bullion less appealing, even though gold is generally seen as an inflation hedge.

U.S. President Donald Trump declared on Friday that he would cease dealing with nations where the United States had a deficit unless the Federal Reserve lowered interest rates.

Regarding the Middle East, a senior Iranian official warned of a “painful response” in the event of additional attacks, while Iran stated it will intensify efforts to address issues brought on by U.S. sanctions that are severely damaging its economy.

Among other metals, platinum dropped 0.8% to $1,805.53, palladium fell 0.7% to $1,396.08, while spot silver dipped 0.2% to $66.03 per ounce.