Gold rises as expectations for the Federal Reserve to raise interest rates in October fade

Gold prices rose in early Asian trading on Monday after weak recent economic data lowered expectations for the US Federal Reserve (the US central bank) to raise interest rates in October.

Data released on Friday showed that US job growth slowed more than expected in September, and the number of non-farm payrolls for the previous two months was sharply revised downward, making another rate hike by the Fed this month highly unlikely.

Fed policymakers had already been leaning toward holding interest rates steady for a second consecutive month to allow more time to study additional economic data before taking further action, and Friday’s weaker-than-expected jobs report reinforced this approach.

Last month, the US central bank raised its benchmark overnight interest rate by 25 basis points to a range between 3.75% and 4%.

Higher interest rates often weigh on gold, as they make holding the non-yielding asset less attractive.