Robust U.S. employment data has heightened expectations for a Federal Reserve interest rate hike, leading to a significant drop in gold prices. Spot gold fell by approximately 3.5% during U.S. trading, slipping below USD 4,320 per ounce, erasing its gains for the year. The anticipation of higher rates also boosted bond yields and the U.S. dollar index. The strong labor market data provides the Federal Reserve with the flexibility to consider rate increases, despite rising energy prices due to Middle East tensions. Typically, higher interest rates negatively impact non-yielding assets like gold, as investors seek better returns elsewhere.