Gold Prices Rise as Fed Rate Hike Expectations Dim
Gold prices rose on Monday as weaker-than-expected US economic data reduced the likelihood of a Federal Reserve rate hike in October. The softer labor market data, including slower job growth in September and revised downward prior employment figures, shifted market expectations.
Spot gold climbed 0.3% to $4,153.56 per ounce, while US gold futures for December delivery gained 0.5% to $4,181.70. Analyst Tim Waterer of KCM Trade noted that the revised Fed hike expectations are supporting gold, but the broader hiking cycle remains intact.
Traders now see an 18% chance of a Fed rate hike in October, down from previous expectations, but still price in an 81% likelihood of a December increase. The US dollar's strength, up 0.4%, limited gold's gains by making dollar-denominated metals more expensive for other currency holders.
Geopolitical tensions in the Middle East, particularly Yemen's military campaign against Iran-backed Houthis, could influence gold prices through their impact on oil prices and inflation. Oil prices slipped despite concerns over Gulf oil infrastructure, as rising crude exports and G7 oil releases added to supplies.
Other precious metals also saw gains, with spot silver up 1.7% to $61.40, platinum rising 1.1% to $1,716.92, and palladium adding 0.3% to $1,165.40.