Gold is recording its seventh consecutive weekly rise, with prices approaching $3,900, boosted by expectations of interest rate cuts and uncertainty over a potential US government shutdown. That day, spot gold prices retreated 0.3% to $3,844.01 per ounce as the dollar strengthened. The precious metal had reached a historic high of $3,896.49 on Thursday and posted a 2% weekly gain. December gold futures contracts remained unchanged at $3,867.70.
Gold resists dollar strength
“The dollar’s rise created a small obstacle for gold prices, but the precious metal remains very close to the $3,900 level,” said KCM Trade chief market analyst Tim Waterer. “Overall, with the US government shutdown creating uncertainty about GDP impact and new rate cuts likely coming again this month, conditions remain favorable for gold to continue its upward trajectory.”
Gold: Economic uncertainty and impact
The government shutdown extended into its second day on Thursday, potentially delaying critical economic data, including the important non-farm payrolls report scheduled for Friday release. Federal Reserve Bank of Dallas President Lorie Logan said the Fed acted correctly by taking some precautionary measures against a sharp labor market deterioration with last month’s rate cut, but must remain “cautious.”
Recent US data reinforced expectations for further cuts, with investors almost certainly pricing in a 25 basis point reduction this month, according to CME Group’s FedWatch tool. Gold, often used as a safe haven during periods of political and economic uncertainty, thrives in low interest rate environments, having strengthened 47% since the beginning of the year.
Meanwhile, Perth Mint gold product sales in September surged 21% compared to the previous month, while silver sales reached a five-month high.
Spot silver prices fell 0.2% to $46.85 per ounce, platinum dropped 0.6% to $1,559.26, while palladium strengthened 0.3% to $1,244.32.
