Gold edges up as October rate hike bets ease, stronger dollar caps gains
GLD•Spot gold rose 0.6% to $4,165.49 an ounce as expectations of an October Federal Reserve rate hike eased, while a stronger dollar limited gains. Traders priced an 18% chance of a hike in October and 69% in December.
1. Gold prices rise
Spot gold rose 0.6% to $4,165.49 per ounce by 0901 GMT, while U.S. gold futures for December delivery gained 0.8% to $4,194.60. UBS analyst Giovanni Staunovo said rising government debt levels remained a structural tailwind for gold, which was holding up despite higher-interest-rate and stronger-dollar headwinds.
2. Rate expectations shift
Traders saw an 18% probability of a Federal Reserve rate hike in October and a 69% chance in December. Expectations for an October increase eased after U.S. job growth slowed more than expected in September and payroll figures for the prior two months were revised lower. Investors were watching for minutes of the September Federal Open Market Committee meeting.
3. Dollar and other metals
The U.S. dollar index rose 0.22%, making dollar-denominated metals more expensive for holders of other currencies. Oil prices fell as Middle East crude exports increased and Group of Seven nations released oil stocks. Silver rose 2.2% to $61.7252 per ounce, platinum gained 2.1% to $1,733.50 and palladium added 1.3% to $1,182.50.
