Gold edged higher after its largest weekly decline since June, as traders assessed the impact of a slowdown in the US jobs market and rising bond yields on the Federal Reserve’s interest rate trajectory. Bullion traded near $4,150 an ounce, following a 3.4% drop last week. US nonfarm payrolls rose by 29,000 in September, missing all economist estimates in a Bloomberg survey, easing pressure on the Fed to act swiftly on inflation.
The market now prices in about a 20% chance of a rate hike in October, down from 70% a week earlier. Higher rates typically weigh on gold, which offers no yield, yet inflation concerns persist. Oil gained amid a widening Middle East conflict as Saudi-backed forces in Yemen initiated a military campaign against Houthi-controlled areas, with Iran-backed Houthis at the center of the escalation.
Treasury Secretary Scott Bessent downplayed elevated borrowing costs, stating they align with global trends, even as some rates reached their highest levels in over two decades. Gold fell more than 6% in September due to energy-driven inflation fears and anticipated higher US rates, though Fed officials have signaled caution about near-term hikes. Minutes from the September Fed meeting, which ended a three-year pause on rate increases, are expected mid-week and may clarify the rate outlook.
Spot gold rose 0.3% to $4,153.66 an ounce in Singapore, while silver climbed 1.3% to $61.15 after a more than 6% weekly decline. Platinum and palladium also rose, and the Bloomberg Dollar Spot Index remained stable after three consecutive weeks of gains.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing