Gold Climbs as Fed October Rate Hike Prospects Dim

Gold prices edged higher in early Asian trading on Monday, as recent weak economic data reduced the likelihood of a Federal Reserve rate hike in October. Spot gold rose 0.3% to USD 4,153.32 per ounce, while US gold futures for December delivery climbed 0.5% to USD 4,182.40.

The shift in market sentiment followed Friday's US jobs report, which showed slower-than-expected job growth in September and significant downward revisions for the prior two months. These figures have effectively ruled out another interest rate hike by the Fed this month.

Fed policymakers were already inclined to skip a second consecutive rate hike to assess more economic data before making further adjustments. The US central bank had raised its benchmark interest rate to the 3.75%-4.00% range last month. Higher interest rates typically weigh on gold prices, as the non-interest-bearing asset becomes less appealing.

Geopolitical tensions also remained in focus, with Yemen's Saudi-backed government announcing a major military campaign against Iran-backed Houthi forces. Among other precious metals, silver gained 1% to USD 60.97, platinum added 0.4% to USD 1,705.70, and palladium firmed 0.7% to USD 1,176.00.