Gold hovers near record high on US shutdown concerns, Fed rate outlook
The metal has hit multiple record highs this year, with the latest one being US$3,871.45, hit on Sep 30
[BENGALURU] Gold prices edged higher on Wednesday (Oct 1), hovering near record levels as the US moved closer to a government shutdown, bolstering safe-haven demand, while weak US labour data reinforced expectations of further Federal Reserve rate cuts.
Spot gold was up 0.2 per cent at US$3,861.22 per ounce, as at 8.30 am. Bullion logged about 12 per cent rise in September, making it the metal’s sharpest monthly rise since August 2011.
US gold futures for December delivery gained 0.4 per cent to US$3,888.80.
The US Senate failed on Tuesday to pass legislation extending government funding, pushing the nation closer to a shutdown, while US President Donald Trump threatened additional federal workforce cuts.
A shutdown could delay the release of the closely watched non-farm payrolls report, due on Friday, a key indicator for Federal Reserve policy decisions.
The Jolts report on Tuesday indicated marginal growth in US job openings for August, alongside a decline in hiring, signalling softening labour market conditions that may pave the way for further interest rate reductions.
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Economic data has bolstered expectations for Fed rate cuts, with traders pricing in a 97 per cent likelihood of a 25-basis-point cut at October’s meeting and a 76 per cent chance in December, according to CME Group’s FedWatch tool
Investors are also eyeing the ADP National Employment Report due later on Wednesday for additional labour market insights.
Gold, a traditional hedge against uncertainty, thrives in a low-interest-rate environment due to its non-yielding nature. The metal has hit multiple record highs this year, with the latest one being US$3,871.45, hit on Sep 30.
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SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said that its holdings rose 0.11 per cent to 1,012.88 tonnes on Tuesday from 1,011.73 tonnes on Monday.
Elsewhere, spot silver was steady at US$46.64 per ounce, platinum held its ground at US$1,573.76 and palladium fell 0.4 per cent to US$1,252.25. REUTERS
