Gold rose on Friday (November 7) as expectations of further interest rate cuts from the Federal Reserve and lingering concerns over the US economic outlook amid the prolonged government shutdown boosted demand.

Spot gold rose 0.8% to $4,010.72 an ounce, as of 09:25 GMT. US gold futures for December delivery rose 0.7% to $4,019.50 an ounce. "The bullish current is still in play," said independent analyst Ross Norman.

"The underlying themes associated with the strengthening gold price remain very relevant: central bank gold purchases and the prospect of interest rate cuts." The US economy shed jobs in October amid losses in the government and retail sectors, while cost-cutting measures and the adoption of artificial intelligence by businesses led to a surge in announced layoffs, data showed on Thursday.

A weak labor market typically makes interest rate cuts more likely. Market participants now see a 67% chance of a Fed rate cut in December, up from nearly 60% before the report. The Fed cut rates last week, and Chairman Jerome Powell hinted that the cut might be the last reduction in borrowing costs for the year.

The focus is now on macroeconomic figures and when the US government shutdown will end, which is also driving demand for gold as a safe-haven asset, said Soni Kumari, commodity strategist at ANZ.

The impasse in Congress has resulted in the longest US government shutdown, forcing investors and the data-dependent Fed to rely on private sector indicators.

Elsewhere, spot silver prices rose 1.7% to $48.80 per ounce. Platinum rose 0.9% to $1,554.66, and palladium rose 1.5% to $1,395.50. However, both metals are expected to suffer weekly losses. (alg)

Source: Reuters