Gold Recovering as Fed Rate Hike Odds Diminish on Weak Jobs Data

Gold prices climbed to $4,153.66 an ounce as a slowdown in the US labor market reduced the Federal Reserve’s likelihood of further interest-rate hikes. The rise came after a sharp 3.4% drop last week, marking gold’s biggest weekly decline since June. The weaker-than-expected US nonfarm payrolls data, which showed just 29,000 jobs added in September, eased pressure on the Fed to raise rates aggressively to combat inflation.

Despite the rebound, gold faces pressure from lingering inflation concerns. Rising international oil prices due to Middle East tensions and elevated US Treasury yields have contributed to a more than 6% drop in gold prices last month. Higher interest rates typically make gold less attractive to investors since it does not pay interest.

Markets are now focusing on the release of the Fed’s September FOMC minutes for insights into future monetary policy. The fed funds futures market now shows only a 20% chance of an October rate hike, down from 70% a week earlier. Silver also rose 1.3% to $61.15 an ounce after a 6% tumble last week, while platinum and palladium advanced as well.