Gold prices remained close to all-time highs in Asian trading on Thursday, supported by haven demand amid the ongoing U.S. government shutdown and mounting expectations of further Federal Reserve rate cuts.
The yellow metal reached a series of peaks this week following the partial U.S. government closure, which came after Congress failed to approve a new spending bill. The shutdown has delayed the release of crucial labor market data, leaving markets uncertain about the future path of interest rates.
Spot gold traded steady at $3,864.63 an ounce, while December gold futures dipped 0.2% to $3,889.65/oz by 00:45 ET (04:45 GMT). On Wednesday, spot gold briefly hit a record $3,895.33/oz.
US Government Shutdown Disrupts Data, Payrolls Delayed
The federal shutdown is expected to last at least three days, affecting multiple government operations. Lawmakers in the Senate have made little progress toward reaching an agreement on funding.
A prolonged closure could impact the U.S. economy, with potential disruptions in essential services, while President Donald Trump’s warnings to dismiss additional federal employees may add strain to the labor sector. Nonfarm payrolls, initially scheduled for release this Friday, are now likely to be postponed until next week.
Private payroll data released Wednesday indicated continued cooling in the labor market, reinforcing expectations of additional Fed rate cuts. This sentiment has pressured the dollar while supporting precious metals.
Other metals eased slightly on Thursday after strong gains earlier in the week. Spot platinum stabilized at $1,563.46/oz, with futures slipping 0.2% to $1,572.35/oz, after both metals reached more than a decade-high earlier.
Industrial metals also advanced, with LME copper up 0.4% at $10,422.05/ton and COMEX copper rising 0.4% to $4.9145/lb.
Markets Pricing in Fed Rate Cut
Market indicators suggest a 97% probability of a 25-basis-point Fed cut later in October, and a 3% chance of a larger 50-bps reduction, according to CME FedWatch. Recent economic data show a slowing U.S. economy, particularly in the labor market, following September’s 25-bps rate cut due to cooling job growth.
However, several Fed officials have cautioned that persistent inflation may limit further cuts. Data released last week showed the core PCE price index, the Fed’s preferred inflation measure, rose as expected in August, remaining above the 2% annual target.
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