U.S. economy added 528,000 jobs in July, gold lost 1% on Friday. TD Securities: Risk of significant reversal in gold price rally as inflation report looms. The July report more than doubled economist expectations of additional 250,000 Jobs. For gold, this means that the price rally could be at risk, says TD Securities.

Friday's selloff was led by a shift in sentiment that markets were premature to price in a Federal Reserve pivot from the aggressive tightening cycle. On Monday, gold staged a recovery, with December Comex gold futures rising back to $1,793.00, up 0.70% on the day.

This week, the attention will be on the July inflation report out of the U.S. The annual inflation pace is projected to come in at 8.7% after rising to 9.1% in June. According to Melek, inflation will continue to be stubbornly high, and the metric to watch would be the core inflation number.

The U.S. July CPI data next week, particularly the core, will be the one to watch. Economists' consensus calls expect the annual core inflation number to accelerate to 6.1% after coming in at 5.9% in June. For gold, this could mean a significant reversal of the move that took prices from below $1,700 to nearly $1,.800.

Chicago Fed President Charles Evans said the U.S. central bank would likely keep using oversized rate hikes until it sees inflation coming down. San Francisco Fed President Mary Daly stated that inflation is still a problem. "The combination of hawkish statements from Fed officials and stronger-than-expected data are the likely catalysts which can trigger additional selling in the days and weeks ahead"
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