Gold rises slightly as the dollar retreats amid fading rate hike expectations

Gold prices rose slightly at the start of Asian market trading on Monday, supported by a weaker US dollar and new economic data that tempered expectations for an interest rate hike in the United States next month.

Spot gold prices rose 0.3 percent to $4,388.62 per ounce by 00:28 GMT, while US December gold futures gained 0.2 percent to $4,444.30.

The unexpected drop in US non-farm payrolls for July, along with last week’s data showing only modest consumer price inflation, contributed to reduced expectations that the Federal Reserve (the US central bank) will raise interest rates next month.

According to the CME Group’s FedWatch tool, markets are pricing in a 33 percent probability of an interest rate hike in September, down from 47 percent a month ago.

Gold, which yields no return, tends to rise in an environment characterized by lower interest rates.

In other precious metals, spot silver rose 0.8 percent to $65.19 per ounce, platinum gained 0.4 percent to $1,755.40, and palladium increased 1.2 percent to $1,329.