Gold Prices Climb as October Fed Rate Hike Fades
Gold prices saw a modest rise during early Asian trading on Monday, as recent weaker economic data reduced the likelihood of a Federal Reserve rate hike in October.
Spot gold climbed 0.3% to $4,153.32 per ounce by 0022 GMT, while US gold futures for December delivery increased 0.5% to $4,182.40. The shift in market sentiment followed Friday's data, which revealed slower-than-expected US job growth in September and significant downward revisions for the previous two months' nonfarm payrolls. These figures effectively ruled out another interest rate hike by the Fed this month.
Fed policymakers had already indicated a preference for waiting to assess more economic data before considering further rate increases. The US central bank had raised its benchmark overnight interest rate by 25 basis points last month, bringing it to a range of 3.75%-4.00%. Higher interest rates typically weigh on gold prices, as the non-interest-bearing asset becomes less appealing to investors.
On the geopolitical front, Yemen's Saudi-backed government announced a major military campaign to retake areas controlled by the Iran-backed Houthis. Meanwhile, other precious metals also saw gains, with spot silver rising 1% to $60.97, platinum adding 0.4% to $1,705.70, and palladium firming 0.7% to $1,176.00.