Gold gains as October Fed rate hike prospects fade

Gold edged higher on Monday, according to Business Recorder, after weak US economic figures reduced expectations of a Federal Reserve rate increase in October. Spot bullion climbed 0.4% to $4,158.17 an ounce by 0150 GMT. December futures in the US advanced 0.6% to $4,186.40, as the appeal of gold, which pays no yield, strengthened.

Hiring in the United States came in below forecasts during September, and payroll figures for the two previous months were revised down sharply, data released Friday showed. Traders now assign a 22% chance to an October Fed hike, down from 64% a week earlier, while still pricing in an 87% probability of a December increase, based on the CME FedWatch Tool. The central bank had lifted its benchmark overnight rate by 25 basis points last month to 3.75%-4.00%, its first rise in three years.

Analyst Tim Waterer of KCM Trade said the market still views the Fed's tightening cycle as intact, even if the central bank pauses in October. He expects volatility to stay high while oil, yields and Fed expectations remain unsettled. Oil prices eased as crude supplies from the Middle East and G7 nations rose, while spot silver gained 1.7% to $61.40 an ounce.