Dollar Weakness Drives Gold Higher as Fed Rate Hike Odds Fall

Gold prices rose last Friday, ending the week higher as market attention remained focused on the latest U.S. inflation and employment data.

The figures were broadly in line with expectations, while signs of cooling in the labor market reinforced expectations that the Federal Reserve (Fed) will keep interest rates unchanged next month.

The U.S. Dollar Index weakened by approximately 0.3%, making dollar-denominated gold more attractive to overseas buyers and supporting gold prices.

The spot price of gold rose 0.7% to US$4,379.95 per ounce, after briefly reaching US$4,449.39 intraday, the highest level since June 5. December gold futures gained 0.4% to settle at US$4,437.30 per ounce.

The decline in the U.S. Dollar Index was a key external factor supporting gold prices during the session, with traders monitoring not only gold prices but also movements in the U.S. Dollar Index, U.S. Treasury yields, and changes in expectations for Fed policy.