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Gold prices hovered close to all-time highs in Asian trading on Thursday, as investors sought safety amid an ongoing U.S. government shutdown and rising confidence that the Federal Reserve will deliver further interest rate cuts.
Spot gold was steady at $3,864.63 an ounce by 00:45 ET (04:45 GMT), after touching a record $3,895.33 on Wednesday. December gold futures dipped 0.2% to $3,889.65/oz.
U.S. Shutdown Clouds Data Outlook
The U.S. government entered its second day of shutdown after lawmakers failed to agree on a spending bill, leaving federal operations disrupted and key economic releases delayed. The closely-watched nonfarm payrolls report, originally scheduled for Friday, is now expected to be pushed back, depriving markets of critical labor market guidance.
The shutdown is projected to last at least three days, with President Donald Trump warning of additional federal layoffs if no resolution is reached. Analysts caution that a prolonged closure could weigh further on economic growth.
Haven Demand Boosts Precious Metals
The political stalemate in Washington and uncertainty over U.S. economic momentum underpinned safe-haven flows into gold, which has already scaled a series of fresh highs this week.
Other precious metals also reflected strong investor demand, though some cooled slightly after surging earlier in the week. Spot platinum steadied at $1,563.46/oz, while silver slipped 0.2% to $47.2535/oz. Both metals recently touched decade highs.
Fed Outlook in Focus
Markets are now pricing in a 97% chance of a 25 basis point cut in October, with only a slim probability of a larger 50 bps move, according to CME FedWatch.
Private payrolls data released Wednesday reinforced the view that the U.S. labor market is cooling, strengthening the case for more monetary easing. However, Fed officials have struck a cautious note, warning that sticky inflation may limit the scope of cuts.
The PCE price index for August rose in line with forecasts, while core PCE inflation remained above the Fed’s 2% target, complicating the outlook.
Industrial Metals Edge Higher
Industrial metals also saw modest gains. LME copper futures rose 0.4% to $10,422.05 a ton, while COMEX copper gained 0.4% to $4.9145 a pound, supported by optimism around looser U.S. monetary policy.
