Weaker U.S. Labor Data Boosts Gold as October Fed Hike Bets Fade

Gold prices are climbing at the start of the week as weaker-than-expected U.S. labor data reduces expectations for a Federal Reserve rate hike in October. This shift is boosting demand for non-yielding bullion, even as markets still anticipate a strong likelihood of a December rate increase.

Spot gold rose 0.4% to $4,158.17 per ounce, while December futures gained 0.6% to $4,186.40. The probability of an October Fed rate hike dropped to 22% from 64% a week earlier, though the chance of a December hike remains high at 87%.

Geopolitical risks in the Middle East are also contributing to market volatility and safe-haven demand. Spot silver surged 1.7% to $61.40 per ounce, while platinum rose 0.6% to $1,708.48. Analysts note that regional tensions will continue to influence gold prices through their impact on oil prices and inflation.

U.S. job growth slowed more than expected in September, with nonfarm payrolls data for the prior two months revised sharply lower. While softer labor market data has reduced tightening expectations for October, the market still views the Fed's broader hiking cycle as intact.