Gold Climbs as Fed Rate Hike Odds for October Diminish

Gold prices rose on Monday as recent weak economic data lowered the chances of a Federal Reserve interest rate hike in October, boosting the appeal of the non-yielding asset. Spot gold climbed 0.4 percent to US$4,158.17 per ounce by 0150 GMT, while US gold futures for December delivery increased 0.6 percent to US$4,186.40.

The softer US job growth in September and revised lower non-farm payrolls for the prior two months reduced expectations of a Fed rate hike in October. Tim Waterer, chief market analyst at KCM Trade, noted that while October hike expectations have dialed back, the broader hiking cycle remains intact. Traders now see a 22 percent probability of an October hike, down from 64 percent a week ago, but still an 87 percent chance of a December increase, according to the CME FedWatch Tool.

Geopolitical tensions also influenced gold prices, as Yemen's Saudi-backed government launched a major military campaign against Iran-backed Houthis. Waterer highlighted that Middle East developments impact oil prices and inflation, contributing to market volatility. Oil prices slipped due to rising crude exports and G7 oil releases, despite concerns over Gulf oil infrastructure damage.

Other precious metals also saw gains, with spot silver rising 1.7 percent to US$61.40 per ounce, platinum up 0.6 percent to US$1,708.48, and palladium firming 0.6 percent to US$1,175.04.