Gold Stabilizes Amid Dollar Rally and Reduced Expectations for US Rate Hike

Gold held steady in spot trading at $4,141.81 per ounce by 00:33 GMT. US December gold futures rose 0.3 percent to $4,169.10.

Yields on 10-year and 30-year US Treasury bonds hit their highest levels in 24 years on Monday, as negative sentiment in the bond market persisted.

Expectations for a US interest rate hike in October declined after data released on Friday showed US job growth slowed more than expected in September, with non-farm payroll figures for the previous two months revised downward.

Nevertheless, traders still see an 86 percent probability of a US interest rate hike in December, according to the CME Group’s FedWatch tool.

Higher interest rates would increase the opportunity cost of holding gold, which yields no return.

However, two central bank officials said on Monday that gold remains a key hedge asset, as concerns over rising government debt and geopolitical instability have bolstered the metal’s appeal as a safe haven, even after yields surged sharply this year.

Data showed that US services sector activity slowed in September, while strong domestic demand strained supply chains, pushing the measure of prices paid by businesses for inputs to their highest level in over four years, suggesting inflation may remain elevated through 2027.

In other precious metals, silver held steady in spot trading at $61.04, platinum rose 0.1 percent to $1,722.40, and palladium gained 0.2 percent to $1,175.39.