Gold prices rose on October 5 amid persistent concerns about the growth of U.S. government debt and weakening expectations of an immediate Federal Reserve rate hike, although a stronger dollar limited the gains. UNN reports this, citing Reuters.
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The spot price of gold rose 0.6% to $4,165.49 per ounce by 09:01 GMT (12:01 Kyiv time). U.S. gold futures for December delivery rose 0.8% to $4,194.60.
"We continue to view rising government debt levels as a structural tailwind for the yellow metal," said UBS analyst Giovanni Staunovo, noting that bullion is holding up relatively well despite the headwinds caused by higher interest rates and a stronger U.S. dollar.
In August, total U.S. debt exceeded $40 trillion for the first time, prompting fresh warnings that a fiscal crisis was brewing in the country.
The minutes of the September meeting of the Federal Open Market Committee are now in focus, which could help investors assess the U.S. central bank's future monetary policy after the central bank raised its rate for the first time in three years last month.
The U.S. Federal Reserve raised its interest rate for the first time in three years16.09.26, 21:52
Expectations for a Fed policy tightening this month fell sharply after U.S. employment growth slowed more than expected in September, while nonfarm payroll data for the previous two months were revised significantly downward, data published on Friday showed.
Euro fell to a 17-month low against the dollar - what are the reasons05.10.26, 10:24
Although traders now see only an 18% probability of a Fed rate hike in October, they still price in a 69% probability of a hike in December, according to the CME FedWatch Tool.
Meanwhile, the U.S. dollar index rose 0.22%, making dollar-denominated metals more expensive for holders of other currencies.
Oil prices fell on Monday as increased oil exports from the Middle East and the release of oil reserves by the "Group of Seven" countries boosted supply, somewhat easing concerns about inflation.
Oil prices fall amid rising exports from the Middle East and the G7 decision05.10.26, 12:06
Gold is traditionally considered a hedge against inflation, but generally loses its appeal relative to income-generating assets in an environment of high interest rates.
On the geopolitical front, Yemen's internationally recognized government, backed by Saudi Arabia, said on Sunday that it was launching a large-scale military campaign to retake all territories controlled by the Iran-backed Houthis.
President of Yemen Announces Large-Scale Offensive Against the Houthis - Reuters04.10.26, 20:34
Among other metals, silver rose 2.2% to $61.7252 per ounce, platinum gained 2.1% to $1,733.50, and palladium added 1.3% to $1,182.50.