Gold Rises as Fed Rate Hike Hopes Dim on Soft Economic Data
Gold prices advanced on Tuesday as market expectations for an October interest rate hike by the Federal Reserve diminished following weaker-than-expected economic data. The shift in sentiment boosted demand for the non-yielding asset, with spot gold climbing 0.4 percent to $4,158.17 per ounce. Meanwhile, US gold futures for December delivery rose 0.6 percent to $4,186.40.
The latest economic reports, released last Friday, revealed slower job growth in September than anticipated, along with significant downward revisions to non-farm payroll figures for the prior two months. These developments reduced the likelihood of a rate increase next month, a move that would have likely pressured gold prices.
The Federal Reserve had raised its benchmark interest rate last month by 25 basis points, the first hike in three years, bringing it to a range between 3.75 percent and 4 percent. Higher interest rates typically weaken demand for gold as they increase the opportunity cost of holding the metal.
Other precious metals also saw gains. Spot silver surged 1.7 percent to $61.40 per ounce, while platinum and palladium each rose 0.6 percent, reaching $1,708.48 and $1,175.04 per ounce, respectively.