Gold prices held steady on Friday, poised for a seventh consecutive weekly rise, as expectations of further U.S. interest rate cuts and concerns over the economic impact of a prolonged government shutdown lent support.
Spot gold prices rose 0.1% to $3,861.04 U.S. per ounce early Friday morning, after hitting a record high of $3,896.49 on Thursday. The bullion has gained 2.7% so far this week. U.S. gold futures for December delivery rose 0.4% to $3,884.30 per ounce.
The prolonged U.S. government shutdown, now in its third day as of Friday, has delayed key economic data, including the non-farm payrolls report scheduled for release on Friday.
Alternate data from public and private sources, showed the U.S. job market likely remained stalled in September with sluggish hiring and no change in unemployment rates.
The data suggests Fed should cut rates, “and as we anticipate further rate cuts, this should support the gold price further over the coming months, looking for the yellow metal to breach the $4,000/oz mark by the end of this year,” said one expert from UBS.
Investors are pricing in a 97% probability of a 25-basis-point rate reduction in October and an 88% likelihood of another similar cut in December.
