The likelihood of gold rising merely on a Fed rate pause was once again called into question this week as the yellow metal registered a weekly loss as its arch-enemy, the dollar, rose.

Spot gold price steadied at $1,920.02 per ounce, the spot price, which reflects bullion trading in real time, was down roughly 1% for the week as opposed to the prior week's 1.3% rise.

The prior week's increase was fuelled by the August non-farm payrolls report for the United States, which showed an increase in unemployment from 3.5% to 3.8% despite an increase in jobs of 187,000 as opposed to the expected 170,000. When the Fed meets on September 20 to discuss U.S. monetary policy, the rising unemployment rate strengthened the idea that rates will remain steady, temporarily pushing gold higher last week.

However, as this week got underway, rumours of the Fed raising interest rates once more appeared in an effort to raise inflation to its 2% yearly target.

The Consumer Price Index, or CPI, which measures inflation, decreased from a four-decade peak of more than 9% per year in June 2022 to as low as 3% in June of this year. However, it started to pick up again in July, hitting 3.2%. That increased the likelihood that the Fed, which has already increased interest rates by 5% over the past 18 months, would resume its previous monetary policy of being aggressive. This week, worries about that caused the Dollar Index to reach six-month highs.