Gold prices hit a nearly three-week high on Tuesday (November 11), boosted by expectations that a potential end to the US government shutdown and a restart of economic data could pave the way for the Federal Reserve to cut interest rates next month.
Spot gold prices rose 0.3% to $4,126.77 an ounce at 3:13 p.m. ET (2013 GMT), after earlier hitting their highest level since October 23. US gold futures for December delivery fell 0.1% to $4,116.30 an ounce.
Gold, traditionally considered a safe-haven asset, also tends to benefit in a low-interest-rate environment because it is a non-yielding asset. "Traders believe (the data) will show some weak economic numbers and that will encourage the Fed to cut rates in December... that's probably driving positive sentiment in the gold and silver markets today," said Jim Wyckoff, senior analyst at Kitco Metals.
The US Senate on Monday approved a compromise that would end the longest government shutdown on record. The shutdown has triggered a data blackout, depriving policymakers and markets of key indicators related to employment and inflation.
The central bank cut interest rates at its last meeting, but Chairman Jerome Powell emphasized that another rate cut this year is far from certain. Markets see a 64% chance of a December rate cut, according to the CME's FedWatch Tool.
Data last week showed the US economy lost jobs in October, while consumer sentiment sank to a three-and-a-half-year low in early November.
Meanwhile, Fed Governor Stephen Miran suggested on Monday that a 50 basis point cut might be appropriate for December, given the weakening labor market and declining inflation.
Gold demand this year and next is expected to reach its strongest level since 2011, UBS said in a note. "Any significant increase in political and financial market risk could push gold towards our upside target of USD 4,700/oz," they added.
Elsewhere, spot silver rose 1.2% to $51.12 per ounce, its highest level since October 21. Platinum rose 0.4% to $1,583.72, and palladium gained 2% to $1,442.75. (alg)
Source: Reuters
Gold prices weakened slightly on Thursday (February 12th), as more solid US employment data reduced market confidence in an imminent Federal Reserve interest rate cut. The strong employment data promp...
Gold prices strengthened on Wednesday, supported by a weaker US dollar and falling US bond yields after the latest economic data reinforced the narrative that the Federal Reserve is likely to continue...
Gold experienced a slight correction in the European session on Tuesday (February 10th), but remained above $5,000/oz as the market held its breath ahead of a series of US data that could alter intere...
Gold held above the psychological $5,000 level at the start of the week, supported by a combination of factors that are "right" for the precious metal : physical demand from China, expectations of low...
Gold prices are still struggling to turn an intraday rebound into a sustained rally. After briefly falling to $4,654 (a four day low) and rebounding, prices were again rejected near $4,900. In the Eur...
Oil prices stabilized on Thursday (February 12th), as the market reassigned a risk premium to US-Iran tensions despite US inventory data showing swelling domestic supplies. This movement confirms one thing: geopolitical headlines are still more...
Gold prices weakened slightly on Thursday (February 12th), as more solid US employment data reduced market confidence in an imminent Federal Reserve interest rate cut. The strong employment data prompted market participants to shift expectations of...
The Hang Seng Index reversed its downward trend in Hong Kong on Thursday (February 12th), weakening by around 0.9% to around 27,000 after a strong session earlier. This decline halted the momentum of the short term rally, as investors began to...