Gold climbs as October Fed rate hike prospects fade
Gold prices edged higher on Monday as recent weak economic data reduced the likelihood of a Federal Reserve rate hike in October, boosting the appeal of the non-interest-bearing asset. Spot gold climbed 0.4% to $4,158.17 per ounce, while US gold futures for December delivery rose 0.6% to $4,186.40.
The slowdown in US job growth in September and downward revisions to previous months' data lowered expectations of a Fed rate hike this month. Analysts noted that while the October hike prospects have diminished, the broader cycle of rate increases remains intact. Traders now see a 22% chance of an October hike, down from 64% a week ago, but still anticipate an 87% likelihood of a December increase.
Geopolitical tensions in the Middle East also played a role in gold's movements. Yemen's Saudi-backed government announced a major military campaign against Iran-backed Houthis, which could impact oil prices and inflation. Oil prices dipped slightly due to increased crude exports and G7 oil releases, despite ongoing concerns over Gulf oil infrastructure damage.
Other precious metals also saw gains, with spot silver rising 1.7% to $61.40 per ounce, platinum up 0.6% to $1,708.48, and palladium firming 0.6% to $1,175.04.