Gold Edges Higher as Fed Hike Bets Fade Amid Weakening US Economy
Gold prices edged higher on Monday after reaching a seven-week high in the previous session. The uptick comes as weak US jobs data tempered expectations for Federal Reserve rate hikes, with investors looking ahead to inflation data for further clues on the central bank's policy path.
The spot gold price rose 0.1% to $4,345.09 per ounce, while US gold futures also increased by 0.1% to $4,404.80.
According to ActivTrades senior analyst Ricardo Evangelista, 'gold prices continue to benefit from last week's positive momentum, following the disappointing US jobs report and the resulting reduction in expectations of further Fed rate hikes.'
The data showed that the US economy unexpectedly shed jobs in July, while previously reported job gains for the prior two months were revised sharply lower. This has weakened expectations for a Federal Reserve rate hike next month, with traders now pricing a 44% chance of a rate hike in September compared to 57% before the jobs report.
Evangelista noted that 'a headline figure below the consensus forecast of 3.4% could further reduce expectations of a Fed rate increase before the end of the year, weakening the dollar and creating upside potential for gold.'