Weaker Dollar, Lower Rate Hike Expectations Boost Gold Prices
Gold prices rose on Monday as the US dollar weakened and expectations of a Federal Reserve rate hike next month dwindled. Spot gold increased by 0.6% to $4,402.49 per ounce, while US gold futures for December delivery edged up 0.5% to $4,458.70.
The weaker dollar made gold cheaper for buyers holding other currencies, and the reduced expectations of a rate hike also supported the bullion. According to UBS analyst Giovanni Staunovo, gold is benefiting from lower US interest rates, which tend to support gold as it does not pay interest.
Data released earlier showed that US payrolls unexpectedly fell in July, and consumer price inflation was mild, reducing expectations of a September rate hike from 51% to 31%. Investors are awaiting the minutes from the Fed's July meeting on Wednesday for further clues on the central bank's policy outlook.