Gold Near Record; Fed Cut Speculation & US Shutdown Support
Gold prices held near record levels on Thursday, supported by expectations of further interest rate cuts and political uncertainty in the US. Spot gold was at $3,866.05/oz (03:57 GMT) after hitting a record $3,895.09 on Wednesday, while December futures edged down 0.2% to $3,891.40. City Index analyst Matt Simpson believes the weak ADP employment data ahead of the NFP has revived Fed cut bets and weakened the dollar, while the US shutdown has added to the safe-haven sentiment. Speculative positions in the futures market have also become increasingly net long, although not yet at extreme levels.
Data-wise, ADP private payrolls recorded -32,000 in September, with August's revised from +54,000 to -3,000. The partial US government shutdown has the potential to delay the release of official indicators, including the NFP, making the market more reliant on non-governmental data. On the policy front, Chicago Fed President Austan Goolsbee admitted he was increasingly wary of inflation and wanted to cautiously lower interest rates, but CME FedWatch still showed the market was almost certainly pricing in a 25 bps cut this month.
As a hedge, gold benefits from a low interest rate environment and political turbulence. The US Supreme Court will also hold a hearing in January on Donald Trump's attempt to remove Fed Chair Lisa Cook, adding another layer of policy uncertainty. In other metals, silver fell 0.2% to $47.22/oz, platinum rose 0.1% to $1,559, and palladium strengthened 1.7% to $1,265.71. (ads)
Source: Newsmaker.id
