Gold climbs above $4,150 as Fed rate hike bets shrink
Gold prices edged higher to approximately $4,160 during Monday’s early Asian trading session. The rise came as softer-than-expected US jobs data reduced expectations of a Federal Reserve rate hike this month. The US Nonfarm Payrolls (NFP) report showed a gain of only 29,000 jobs in September, well below market expectations of 90,000. This weaker data has led traders to lower their bets on a rate hike, with the CME FedWatch Tool now indicating just a 22.1% chance of an increase, down from around 70% earlier in the week.
Despite the positive momentum, gold’s upside remains capped by concerns over oil-driven inflation. Tensions in the Strait of Hormuz, amid ongoing US-Iran conflicts, could exacerbate inflation worries, potentially weighing on gold prices. Analysts at UOB Group noted that gold spot prices softened to $4,156, with elevated real yields limiting gains. The metal had earlier risen to $4,219 but closed 0.6% lower at $4,157 as these yields continued to cap its upside.
Fed official Christopher Logan’s hawkish remarks have also bolstered expectations of further rate hikes, supporting the US Dollar. Logan emphasized the need for higher rates to achieve price stability, reinforcing a stronger Dollar narrative. Technical analysis suggests that gold maintains a bearish near-term bias, with key resistance levels at $4,275 and $4,445. Immediate support is located at $4,102.30, with a break below this level potentially leading to further declines.