Gold heads for its seventh consecutive weekly gain, though it was little changed early Friday, amid uncertainty surrounding the U.S. government shutdown. Spot gold hit a record high of $3,896.49 on Thursday and has gained 3.1% so far this week.
The closure of the government, made gold more attractive to investors because of its traditional status as a haven asset. A key economic indicator scheduled for release Friday – the monthly jobs report for September, was delayed indefinitely because of the shutdown, depriving investors of the direction it usually provides.
Federal Reserve officials have said that a weak labor market drove last month’s interest rate cut – the first in nine months – so further signs of weakness in the labor market could have bolstered already widely anticipated chances of another rate cut this month and beyond. Lower interest rates are typically bullish for the yellow metal.
December gold futures fell 0.8% Thursday to settle at $3,868.10 an ounce on Comex, and the front-month contract gained 1.6% in the first four days of the week. Bullion surged 10% in September, the most in six months, after adding 5% in August and gaining 1.2% in July. It’s up 46% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The December contract is currently up $44.00 (+1.14%) an ounce to $3912.10 and the DG spot price is $3883.50.
Private payrolls fell 32,000 in September, their biggest decline in 2.5 years, in the latest monthly report from ADP on Wednesday.
The Bureau of Labor Statistics, which calculates the monthly jobs report, is one of the government agencies unable to operate during the shutdown, which began Oct. 1, the start of the federal fiscal year. The agency’s weekly initial jobless claims report, which typically comes out on Thursdays, also wasn’t released this week.
The Fed’s favorite inflation report, the personal consumption expenditures price index, came out last week, before the shutdown, and showed that so-called core inflation – which excludes volatile food and energy prices, held at 2.9% year on year in August, while the figure was also unchanged at 0.2% month on month. The Fed has said it’s balancing inflation, which is above the central bank’s target, with a worsening job market as it sets monetary policy.
The Fed lowered interest rates by 25 basis points in September to 4.00% to 4.25%.
Almost 97% of the investors tracked by the CME FedWatch Tool are betting that the Fed will reduce rates by 25 basis points in October, with the rest expecting the central bank to hold rates unchanged. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts last year.
Front-month silver futures fell 2.8% Thursday to settle at $46.38 an ounce on Comex, and the December contract is down 0.6% so far this week. Silver rose 15% last month, the biggest monthly rally in two and a half years, after climbing 11% in August and gaining 1.5% in July. It rose 21% in 2024. The December contract is currently up $1.326 (+2.86%) an ounce to $47.695 and the DG spot price is $47.67.
Spot palladium lost 0.6% Thursday to $1,248.00 an ounce and decreased 3.1% so far this week. Palladium rose 14% in September after declining 7.8% in August and climbing 8.8% in July. Palladium dropped 17% last year. Currently, the DG spot price is up $32.70 an ounce to $1274.00.
Spot platinum rose 10 cents Thursday to $1,566.30 an ounce and lost 0.8% in the first four days of the week. It increased 15% in September after rising 5.9% in August and dropping 3.9% in July. Platinum lost 8.4% in 2024. The DG spot price is currently up $61.80 an ounce to $1623.80.
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