Gold prices experienced a modest increase during early trading in Asia on Monday, as recent weak economic indicators diminished the likelihood of a Federal Reserve rate hike in October. Spot gold increased by 0.3% to $4,153.32 per ounce as of 0022. US gold futures for December delivery increased by 0.5%, reaching a price of $4,182.40. Data released on Friday indicated that US job growth decelerated more than anticipated in September, with the nonfarm payrolls count for the preceding two months revised significantly downward, effectively diminishing the likelihood of an additional interest rate hike from the Fed this month.
Fed policymakers were already inclined to refrain from implementing a second consecutive rate hike this month, allowing them additional time to analyse further economic data before making another decision. The cooler-than-anticipated job market report released on Friday supports this cautious approach. The US central bank last month raised its benchmark overnight interest rate by 25 basis points to the 3.75%-4.00% range.
Rising rates frequently exert downward pressure on gold prices, as the appeal of holding this non-interest-bearing asset diminishes. On the geopolitical front, Yemen’s Saudi-backed, internationally recognised government announced the initiation of a significant military campaign aimed at reclaiming all territories within the country that are under the control of the Iran-backed Houthis. Among other metals, spot silver increased by 1% to $60.97, platinum rose by 0.4% to $1,705.70, and palladium strengthened by 0.7% to $1,176.00.
