Gold prices moved modestly higher on Monday following their largest weekly decline since June, as weaker US employment data reduced expectations for another Federal Reserve interest-rate increase.
At 02:12 ET (06:12 GMT), XAU/USD rose 0.21% to $4,149.19 an ounce, while gold futures gained 0.4% to $4,176.97. Silver rose 1.6% to $61.36 an ounce and platinum increased 1.1% to $1,719.71.
The US Dollar Index advanced 0.4% to 102.31.
Gold continued to face pressure from elevated US Treasury yields and the potential inflationary impact of higher energy prices.
US Payrolls Reduce Expectations for October Rate Increase
US nonfarm payrolls increased by 29,000 in September, below analyst expectations, according to data released on Friday.
The employment figures reduced market expectations that the Federal Reserve will raise interest rates again at its October meeting. Markets were pricing in an approximately 20% probability of an October increase, compared with around 70% a week earlier.
Higher interest rates can weigh on demand for gold because the metal does not generate interest income.
Gold fell more than 6% in September, recording its largest monthly decline since June, as markets assessed the possibility that energy-related inflation could keep interest rates elevated for longer.
Federal Reserve officials have pushed back against expectations of an imminent rate increase. Minutes from the central bank’s September meeting, when policymakers raised rates for the first time in three years, are scheduled for release later this week and could provide additional indications about the monetary policy outlook.
Energy Prices and Treasury Yields Remain in Focus
Inflation risks remain a consideration for markets as oil prices respond to developments in the Middle East.
In Yemen, Saudi-backed forces launched an operation aimed at retaking territory controlled by Iran-backed Houthi forces.
Higher energy prices could contribute to inflationary pressures and affect the Federal Reserve’s policy considerations, even as weaker employment data have reduced near-term expectations for another rate increase.
US Treasury yields have also remained elevated, with some rates reaching their highest levels in more than two decades.
US Treasury Secretary Scott Bessent played down concerns surrounding higher borrowing costs, saying the increase in yields was broadly consistent with developments in global markets.
According to ANZ, weaker employment figures and reduced expectations for an October rate increase are providing some support to gold, while elevated bond yields and renewed risks from energy-related inflation are limiting further gains.