Gold Climbs on Lower Fed Rate Hike Expectations
Gold prices edged higher on Monday, supported by weaker-than-expected U.S. economic data that reduced the likelihood of a Federal Reserve rate hike in October. Spot gold climbed 0.3% to $4,153.56 per ounce, while U.S. gold futures for December delivery rose 0.5% to $4,181.70.
The recent slowdown in U.S. job growth, along with downward revisions to prior employment figures, has lowered expectations for an October rate hike. Traders now see only an 18% chance of a hike this month, though an 81% probability remains for December, according to the CME FedWatch Tool.
Tim Waterer, chief market analyst at KCM Trade, noted that while the softer labor market data has eased October hike expectations, the broader hiking cycle still appears intact. Meanwhile, a stronger U.S. dollar limited gold’s gains, making dollar-denominated metals more expensive for foreign investors.
Geopolitical tensions in the Middle East also influenced gold’s movement, as Yemen’s Saudi-backed government launched a major military campaign against the Iran-backed Houthis. Waterer emphasized that developments in the region could impact oil prices and inflation, keeping volatility elevated.
Other precious metals also saw gains, with spot silver rising 1.7%, platinum up 1.1%, and palladium adding 0.3%.