Gold gains as dollar weakens, US rate-cut bets grow

Gold rose on Friday as the dollar slid after US private-sector job reports signalled weakness in the country’s labour market and lifted expectations of another US interest rate cut, while a prolonged government shutdown also boosted safe-haven demand.

Spot gold was up 0.4% at $3,994.03 per ounce, as of 0341 GMT, but set for a weekly loss of 0.3%.

Bullion has fallen nearly 8% since hitting a record high of $4,381.21 on October 20. US gold futures for December delivery were up 0.3% at $4,004.40 per ounce.

The US economy shed jobs in October amid losses in the government and retail sectors, while cost-cutting measures and the adoption of artificial intelligence by businesses led to a surge in announced layoffs, data showed on Thursday.

“The private jobs data is still indicating that a rate cut in December is likely and that’s why gold prices are getting some kind of support,” said Soni Kumari, a commodity strategist with ANZ.

The dollar retreated, leading declines among major currencies as investors lacking official data on the US labour market seized upon signs of weakness in private sector surveys.

A weak jobs market typically makes rate cuts more likely.

Market participants now see a 69% chance of a Fed rate cut in December, up from close to 60% in the previous session.

The Fed cut interest rates last week and Chair Jerome Powell suggested it might be the last reduction in borrowing costs for the year.

The focus is now on macro numbers and when the US shutdown is going to get over, which is also helping safe-haven demand for gold, Kumari added.

A congressional impasse has resulted in what is now the longest-ever US government shutdown, which has forced investors and the data-dependent Fed to rely on private sector indicators.

Non-yielding gold tends to do well in a low-interest-rate environment and during times of economic uncertainty.

Elsewhere, spot silver firmed 0.7% to $48.31 per ounce, but was set for a weekly loss of 0.7%, platinum slid 0.4% to $1,534.21, down nearly 2% for the week, and palladium rose 0.3% to $1,379.33, headed for a weekly gain of 0.5%.