Gold climbs as October Fed rate hike expectations fade

Gold prices climbed higher on Monday as recent weak economic data reduced the likelihood of a Federal Reserve rate hike in October, boosting the appeal of the non-yielding asset. Spot gold rose 0.4% to $4,158.17 per ounce, while US gold futures for December delivery increased 0.6% to $4,186.40.

The latest US job data showed slower-than-expected growth in September, along with significant downward revisions for the previous two months. This shift has lowered the market's expectations of a Fed rate hike in October from 64% to 22%, although traders still anticipate an 87% chance of a hike in December. Tim Waterer, chief market analyst at KCM Trade, noted that while the October pause is supportive for gold, the broader hiking cycle remains intact.

Geopolitical tensions in the Middle East also played a role in gold's movement. Yemen's Saudi-backed government announced a major military campaign against the Iran-backed Houthis, adding to regional uncertainties. Waterer highlighted that developments in the Middle East could impact oil prices and inflation, maintaining market volatility.

Other precious metals saw gains as well, with spot silver up 1.7% to $61.40 per ounce, platinum rising 0.6% to $1,708.48, and palladium firming 0.6% to $1,175.04.