Gold bar and coins ©Adobe Stock Images
Gold prices moved higher on Monday after recording their largest weekly decline since June, as weaker US employment figures reduced market expectations for another Federal Reserve interest-rate increase in October.
At 02:12 ET (06:12 GMT), spot gold rose 0.21% to $4,149.19 an ounce, while gold futures increased 0.4% to $4,176.97. Silver advanced 1.6% to $61.36 and platinum gained 1.1% to $1,719.71.
The US Dollar Index was up 0.4% at 102.31.
The decline in expectations for an October rate increase provided some support to gold, although elevated Treasury yields and inflation risks associated with energy prices remained factors for the market.
September Payrolls Come in Below Expectations
US nonfarm payrolls increased by 29,000 in September, below analyst expectations, according to figures released on Friday.
Following the employment report, markets were pricing in around a 20% probability that the Federal Reserve would raise rates at its October policy meeting, compared with approximately 70% a week earlier.
Higher interest rates generally increase the opportunity cost of holding gold because the metal does not provide interest income.
Gold declined by more than 6% during September, its largest monthly fall since June, as investors considered whether higher energy prices and associated inflationary pressures could keep US interest rates elevated.
Federal Reserve officials have also pushed back against expectations for an imminent increase in borrowing costs.
Minutes from the Fed’s September meeting are due later this week. Policymakers increased interest rates at that meeting for the first time in three years, and the minutes could provide further information about their assessment of inflation and future policy.
Middle East Developments Maintain Energy Inflation Risk
Oil prices have risen as markets assess an expansion of the conflict in the Middle East, maintaining attention on the potential inflationary impact of energy costs.
Saudi-backed forces in Yemen launched an operation aimed at retaking areas controlled by Iran-backed Houthi forces.
Further increases in energy prices could contribute to inflation and complicate the Federal Reserve’s policy outlook, despite the weaker employment figures reducing immediate expectations for another rate increase.
US Treasury yields have meanwhile remained elevated, with some rates reaching their highest levels in more than 20 years.
US Treasury Secretary Scott Bessent said the rise in borrowing costs was broadly consistent with trends in global markets, playing down concerns about the increase in yields.
ANZ said weaker labour-market data and lower expectations for an October Fed rate increase were providing some support to gold. However, the bank said elevated bond yields and renewed energy-related inflation risks continued to limit further gains.