Gold Climbs as October Fed Rate Hike Expectations Fade
Gold prices climbed on Monday as expectations for a Federal Reserve rate hike in October diminished following weak economic data. Spot gold rose 0.4% to $1,958.17 per ounce, while US gold futures for December delivery gained 0.6% to $1,986.40.
The slowdown in US job growth in September and downward revisions for the prior two months contributed to reduced expectations of an October rate hike. Tim Waterer, chief market analyst at KCM Trade, noted that while the softer labor market data provided some support for gold, the broader Fed hiking cycle remains intact.
Traders now see only a 22% probability of a Fed rate hike in October, down from 64% a week ago, but still price in an 87% chance of an increase in December. The Fed last raised rates in September to a range of 3.75%-4.00%.
Geopolitical tensions in the Middle East also influenced gold prices, with Yemen’s Saudi-backed government launching a major military campaign against the Iran-backed Houthis. Waterer emphasized that Middle East developments could impact oil prices and inflation, keeping volatility elevated.
Other precious metals also saw gains, with spot silver up 1.7% to $61.40 per ounce, platinum rising 0.6% to $1,708.48, and palladium firming 0.6% to $1,175.04.