Gold Climbs as October Fed Rate Hike Prospects Dim

Gold prices saw a modest rise during early Asian trading on Monday, as recent weak economic data reduced the likelihood of a Federal Reserve rate hike in October. Spot gold climbed 0.3% to $4,153.32 per ounce by 0022 GMT, while U.S. gold futures for December delivery increased 0.5% to $4,182.40.

The shift in sentiment followed Friday's U.S. job data, which showed slower-than-expected job growth in September and significant downward revisions for the prior two months. These findings have effectively ruled out another interest rate hike by the Fed this month, reinforcing the central bank's cautious stance. The Fed had already signaled a pause to assess more economic data before considering further rate adjustments, following its last rate increase to a range of 3.75%-4.00% in September.

Higher interest rates typically weigh on gold prices, as the non-interest-bearing asset becomes less appealing to investors. On the geopolitical front, tensions in Yemen escalated as the Saudi-backed government launched a major military campaign to retake areas controlled by the Iran-backed Houthis. Other precious metals also saw gains, with spot silver rising 1% to $60.97, platinum adding 0.4% to $1,705.70, and palladium firming 0.7% to $1,176.00.

The economic calendar for the day includes key PMI data releases from Japan, France, Germany, the EU, and the UK, along with the U.S. ISM Non-Mfg PMI for September.