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Gold Prices Surge as October Fed Rate Hike Prospects Dim
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News18•05-10-2026, 08:37
Gold Prices Surge as October Fed Rate Hike Prospects Dim
- •Gold prices rose as softer US economic data reduced expectations of an October Federal Reserve rate hike, increasing the appeal of the non-yielding asset.
- •Spot gold climbed 0.4% to $4,158.17 per ounce, while US gold futures for December delivery increased 0.6% to $4,186.40.
- •US job growth slowed more than anticipated in September, with prior months' nonfarm payrolls revised sharply lower, impacting Fed hike probabilities.
- •Traders now assign a 22% probability to an October Fed rate hike, down from 64% a week ago, though an 87% chance for a December hike remains.
- •Geopolitical tensions in the Middle East and their potential impact on oil prices and inflation continue to influence gold's volatility, alongside fluctuating yields and Fed expectations.
Key Questions Answered
Gold prices drifted higher after soft US economic data, including slower job growth in September and downward revisions to prior months, sharply lowered market expectations of a Federal Reserve rate hike in October.
Traders currently see a 22% probability of a Fed rate hike in October, down significantly from 64% a week prior, while still pricing in an 87% chance of an increase in December based on the CME FedWatch Tool.
Yemen's Saudi-backed government launched a major military campaign to recapture Houthi-controlled areas. These Middle East developments affect gold through their impact on oil prices and the broader inflation outlook.
