Gold gains as October Fed rate hike prospects fade

Mon Oct 05 2026

Gold prices moved higher on Monday after softer economic data sharply reduced expectations of a Federal Reserve rate hike in October, increasing the appeal of the non-yielding asset. Pasted text

Spot gold rose 0.4% to $4,158.17 per ounce by 0150 GMT, while US gold futures for December delivery gained 0.6% to $4,186.40. Pasted text

US job growth slowed more than expected in September, while nonfarm payrolls for the previous two months were revised sharply lower.

India’s 24K gold price was ₹1,47,886 per 10g, down ₹190 or 0.13%. Silver was ₹2,27,792 per kg, up ₹2,097 or 0.93%. Pasted text

Tim Waterer, chief market analyst at KCM Trade, said softer labour-market data had reduced expectations of an October Fed hike and provided support to gold. However, markets continued to view the Fed's broader hiking cycle as intact even if the central bank pauses in October. Pasted text

Traders now see a 22% probability of a Fed rate hike in October, down from 64% a week earlier, while still pricing an 87% chance of an increase in December, according to the CME FedWatch Tool. Pasted text

The US central bank raised its benchmark overnight interest rate by 25 basis points last month to the 3.75%-4.00% range. It was the Fed's first rate increase in three years. Pasted text

On the geopolitical front, Yemen’s Saudi-backed, internationally recognised government said it was launching a major military campaign to recapture areas controlled by the Iran-backed Houthis.

Waterer said developments in the Middle East would continue to affect gold, particularly through their impact on oil prices and the broader inflation outlook. He added that volatility was likely to remain elevated while oil prices, yields and Fed expectations remained in flux. Pasted text

Oil prices slipped as rising crude exports from the Middle East and the release of oil by G7 nations increased supplies, despite continuing concerns about further damage to Gulf oil infrastructure amid the Iran war. Pasted text

Among other precious metals, spot silver gained 1.7% to $61.40 per ounce, platinum rose 0.6% to $1,708.48, and palladium increased 0.6% to $1,175.04. Pasted text

Source: http://in.reuters.com