Gold prices held near record highs on Thursday in Asian trading, buoyed by safe-haven buying amid the ongoing U.S. government shutdown and increasing expectations of further Federal Reserve interest rate reductions.
The precious metal climbed to multiple highs this week after the U.S. government partially closed following Congress’s failure to pass a spending bill. The shutdown has delayed the release of critical labor market data, leaving investors uncertain about future interest rate decisions.
Spot gold traded at $3,864.63 an ounce, while December gold futures slipped 0.2% to $3,889.65/oz by 00:45 ET (04:45 GMT). On Wednesday, spot prices briefly reached a record $3,895.33/oz.
Shutdown Impacts Economic Data and Payroll Releases
The federal government is expected to remain closed for at least three days, disrupting numerous operations. Senate negotiators have made limited progress on a funding agreement.
A prolonged shutdown may weigh on the U.S. economy, especially essential services, while President Donald Trump’s warnings about additional federal layoffs could further strain the labor market. Nonfarm payrolls data originally scheduled for Friday will likely be delayed to next week.
Private payroll numbers released Wednesday showed a slowdown in the U.S. labor market, reinforcing expectations of further Fed rate cuts. This trend pressured the dollar while benefiting precious metals.
Other metals also eased after a strong week. Spot platinum stabilized at $1,563.46/oz, while platinum futures dipped 0.2% to $1,572.35/oz, following 10-year highs earlier in the week.
Copper futures advanced 0.4%, with LME copper at $10,422.05/ton and COMEX copper at $4.9145/lb.
Fed Rate Cut Expectations
Markets are pricing in a 97% probability of a 25-basis-point Fed cut in late October and a 3% chance of a 50-bps cut, according to CME FedWatch. Economic readings point to a cooling U.S. economy, particularly in jobs growth, after the Fed’s September 25-bps rate reduction.
Nonetheless, some Fed officials warn that persistent inflation could limit additional easing. August’s core PCE index, the Fed’s preferred inflation measure, rose as expected, staying above the 2% target.
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