Gold ticks higher on softer Fed outlook as strong dollar limits gains

Gold edged up on Monday as traders scaled back expectations for a U.S. Federal Reserve rate increase this month, though a firmer dollar and elevated Treasury yields curbed the advance.

By mid-morning in New York, spot gold was up about 0.2% at $4,152.19 per ounce, while U.S. December futures added 0.4% to $4,180.30.

Fed expectations ease after softer jobs data

Recent U.S. economic releases have largely undershot forecasts, prompting markets to temper near-term policy tightening bets. Weakness in September job growth, alongside downward revisions to prior months’ nonfarm payrolls, led traders to mark down the probability of an October rate hike to roughly 22%, from about 70% a week earlier, according to futures pricing. Even so, markets still ascribe a high likelihood—around the mid-80% range—of another increase by December.

Gold often struggles when interest rates rise because it offers no yield, yet it can attract demand as a hedge against persistent inflation. The shifting rate path has therefore been a key swing factor for bullion in recent sessions.

Stronger dollar and higher yields cap upside

Despite the softer near-term rate outlook, the U.S. dollar advanced, making dollar-priced metals more expensive for buyers using other currencies. At the same time, 10-year U.S. Treasury yields hovered near their highest levels in about two decades. The combination of a resilient greenback and lofty long-term yields has limited gold’s ability to extend gains.

Analysts cautioned that, while the pullback in rate expectations provides some support, a sustained dollar rally could still spark a near-term dip in bullion before bargain-hunters reemerge.

What’s next on the policy front

Investors are awaiting the release of the September Federal Open Market Committee minutes later this week for clues on the trajectory of monetary policy. The Fed raised interest rates last month for the first time in three years, and the minutes may shed light on how officials see the balance of risks between inflation and growth as they weigh further moves.

Longer-term outlook

Looking beyond the immediate policy debate, a leading precious-metals consultancy anticipates gold could climb to record highs in 2027 as investors diversify away from traditional dollar-denominated assets. It also projects an average price of $5,330 per ounce next year, signaling expectations for a supportive macro backdrop over the medium term.

Other precious metals

• Silver rose 1.9% to $61.53 per ounce.
• Platinum gained 1.6% to $1,724.65.
• Palladium added 1.2% to $1,181.75.

Overall, bullion found modest footing as hopes for a pause in near-term Fed tightening grew, but the move was checked by a persistent dollar bid and high long-end yields—leaving upcoming Fed communications and macro data as the next catalysts for direction.