Gold hovers near all-time high on Fed rate-cut bets, US shutdown

Gold prices held steady on Thursday, hovering near the record high hit the day before, helped by expectations of further U.S. rate cuts and political uncertainty.

Spot gold held its ground at $3,866.05 per ounce, as of 0357 GMT, after hitting an all-time high of $3,895.09 on Wednesday.

U.S. gold futures for December delivery eased 0.2% to $3,891.40.

“Weak ADP employment data ahead of non-farm payrolls report has revived Fed-cut bets to weaken the US dollar. Gold has also been given a bump from the U.S. government shutdown,” City Index senior analyst Matt Simpson said.

“Futures market positioning continues to show large speculators and managers funds are chasing the move higher, with their net-long exposure rising but not near a extreme.”

Data showed that U.S. private payrolls fell by 32,000 jobs in September after a downwardly revised 3,000 decline in August.

The U.S. government has shut down much of its operations, potentially putting thousands of federal jobs at risk, after partisan divisions prevented Congress and the White House from reaching a funding deal.

The shutdown could delay the release of economic indicators, including the closely watched non-farm payrolls (NFP) report scheduled for Friday.

Meanwhile, Chicago Fed President Austan Goolsbee said he is starting to get more concerned about inflation, making him want to be “careful” about lowering interest rates.

Traders are pricing in a near-certain 25 basis-point cut to the Fed’s key interest rate this month, according to the CME FedWatch tool.

Gold, often used as a safe store of value during times of political and financial uncertainty, thrives in a low interest rate environment.

The U.S. Supreme Court said it would hear arguments in January over Trump’s attempt to remove Fed Governor Lisa Cook.

Elsewhere, spot silver slipped 0.2% to $47.22 per ounce, platinum rose 0.1% to $1,559 and palladium gained 1.7% to $1,265.71.