Gold Rises as Fed Rate Hike Expectations Dim
Gold prices edged higher on Monday, responding to recent economic data that reduced expectations of an October interest rate hike by the Federal Reserve. Spot gold climbed 0.3% to $4,153.56 per ounce, while US gold futures for December delivery rose 0.5% to $4,181.70. The shift came after a weaker-than-expected US jobs report in September, which also saw revisions lowering previous payroll counts.
Analysts noted that the softer labor market data has lowered the likelihood of a Fed rate hike this month, providing some support for gold. However, markets still anticipate a rate increase in December, with traders assigning an 18% chance of a hike in October and an 81% chance for December, according to the CME FedWatch Tool. The US central bank had last raised rates in September to a range of 3.75%-4.00%.
Gains in gold were constrained by a stronger US dollar, which rose 0.4%, making dollar-denominated metals more expensive for foreign investors. Geopolitical tensions in the Middle East also factored into market sentiment, with Yemen's Saudi-backed government launching a major military campaign against Iran-backed Houthis. Analysts suggested that Middle East developments could influence gold prices through their impact on oil and inflation.
Other precious metals also saw gains, with spot silver up 1.7% to $61.40, platinum rising 1.1% to $1,716.92, and palladium adding 0.3% to $1,165.40. Oil prices slipped amid rising exports from the Middle East and G7 nations' oil releases, offsetting concerns over Gulf oil infrastructure.