Gold climbs as October Fed rate hike expectations dim

Gold prices saw a modest increase on Monday, driven by fading expectations of a Federal Reserve rate hike in October. The shift in market sentiment boosted demand for the non-yielding asset, as softer economic data reduced the likelihood of tighter monetary policy.

The upward momentum in gold was tempered by a stronger dollar and higher U.S. Treasury yields. Spot gold prices dipped slightly by 0.2%, settling at $4,133.59 per ounce by 2:25 p.m. EDT. Meanwhile, U.S. gold futures for December delivery fell marginally by 0.02% to $4,161.5.

The interplay between these factors created a balanced dynamic in the gold market, with investors weighing the appeal of the precious metal against the headwinds of a stronger dollar and rising yields. The reduced prospect of an October rate hike remained a key driver of gold's resilience.