Gold rose to another record — closing in on the $4,000 an ounce mark — as the US Federal government shutdown dragged on.
Bullion advanced to $3,920.63 an ounce, before paring some gains. The disruption in the US has delayed payroll data, which was due on Friday, making a murky economic outlook even more unclear.
With the lack of data, traders are depending on private reports for more clarity on the economy, while the central bank is finding it challenging to make monetary policy decisions. Rates traders are still pricing in a quarter-point cut for the end of the month, which will benefit gold further as it doesn't pay interest.
Gold has surged almost 50% this year, spurred by the massive jolt of economic and geopolitical uncertainty that President Donald Trump has brought to the market. The Federal Reserve's rate-cutting cycle and central bank purchases to diversify away from dollar assets have also been major tailwinds.
The “backdrop is intact with the Fed on path to cut rates further, alongside the weakening labor market,” said Ahmad Assiri, an analyst at Pepperstone Group Ltd. However, “it feels like the risk-reward dynamics are shifting and a tactical pullback would be viewed as a healthy phase within an extended rally,” he said.
Gold rose 0.5% to $3,905.54 an ounce as of 8:45 a.m. Singapore time after capping a seventh weekly gain on Friday. The Bloomberg Dollar Spot Index advanced 0.3%. Silver, platinum and palladium all climbed.
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