Gold inches up as October Fed rate hike prospects fade

Gold prices inched higher during early Asia trade on Monday as recent soft economic data lowered expectations of a Federal Reserve rate hike in October.

FUNDAMENTALS

* Spot gold was up 0.3% to USD 4,153.32 per ounce by 0022 GMT. US gold futures for December delivery rose 0.5% to USD 4,182.40.

* Data on Friday showed that US job growth slowed more than expected in September and the nonfarm payrolls count for the prior two months was revised sharply lower, almost taking another interest rate hike from the Fed this month off the table.

* Fed policymakers were already leaning against delivering a second straight rate hike this month to give them time to sift through more economic data before pulling the trigger again, and a cooler than expected job market report Friday leaves that approach intact.

* The US central last month raised its benchmark overnight interest rate by 25 basis points to the 3.75%-4.00% range.

* Rising rates often pressure gold prices, as holding the non-interest-bearing asset becomes less attractive.

* On the geopolitical front, Yemen’s Saudi-backed, internationally recognized government said it was launching a major military campaign to recapture all areas of the country controlled by the Iran-backed Houthis.

* Among other metals, spot silver gained 1% to USD 60.97, platinum added 0.4% to USD 1,705.70 and palladium firmed 0.7% to USD 1,176.00.

(Reporting by Ashitha Shivaprasad in Bengaluru)