Gold edges up as October rate hike bets ease, stronger dollar caps gains
GLD•Gold rose on Monday as expectations of an immediate Federal Reserve rate hike eased and concerns about US debt supported prices, while a stronger dollar limited gains. Spot gold was up 0.4% at $4,159.89 an ounce, and traders priced an 18% chance of an October hike and a 69% chance of a December hike.
1. Gold prices rise
Spot gold rose 0.4% to $4,159.89 per ounce by 1138 GMT, while December US gold futures added 0.64% to $4,188.70. UBS analyst Giovanni Staunovo said rising government debt remained a structural tailwind for gold, which was holding up despite higher interest rates and a stronger dollar.
2. Rate expectations shift
The US dollar index gained 0.3%, making dollar-denominated metals more expensive for holders of other currencies. Traders saw an 18% probability of a Federal Reserve rate hike in October and a 69% chance of an increase in December, as expectations of near-term tightening eased after slower-than-expected US job growth in September.
3. Debt and other metals
US debt topped $40 trillion for the first time in August. Oil prices fell as rising Middle East exports and a Group of Seven stock release boosted supplies, while silver rose 2.3%, platinum gained 1.7% and palladium added 1.1%.
