Gold rises toward $4,400 as US rate hike fears ease
What's the story
Gold prices witnessed a slight increase on Monday, thanks to a weaker dollar and new economic data from the US. As of 6:00am IST, spot gold was up 0.3% at $4,388.62 per ounce while December US gold futures rose 0.2% to $4,444.30. The US dollar index fell by 0.1%, making metals priced in greenback cheaper for holders of other currencies. Currently, the market indicates a lower probability of an increase in September, which is favorable for non-yielding gold.
Economic impact
Factors contributing to gold prices' surge
An unexpected drop in US nonfarm payrolls for July, along with last week's data showing only mild consumer price inflation, has lowered expectations of a Federal Reserve interest rate hike next month.
The markets are now pricing in a 33% chance of a September rate hike, down from 47% last month.
The Federal Reserve's minutes from July's meeting, due on Wednesday, will be closely watched for more hints about the future of monetary policy and its impact on gold prices.
Global influence
Geopolitical developments and their impact on gold prices
On the geopolitical front, US President Donald Trump's envoys met with Egyptian, Qatari, and Turkish mediators in Cairo on Sunday. The meeting was aimed at advancing his Gaza peace plan despite Israel's continued airstrikes in the region.
Meanwhile, gold discounts in India widened last week to their highest levels in over two months as a surge in bullion prices curbed consumption.