Gold prices rose to a more than three-week high on Thursday (November 13), supported by expectations that the release of economic data following the reopening of the US government could strengthen the case for a Fed rate cut next month.

Spot gold rose 0.2% to $4,206.64 an ounce at 11:03 a.m. EST (1603 GMT), its highest price since October 21. US gold futures for December delivery fell 0.1% to $4,211.50 an ounce.

Traders expect economic data released after the shutdown will reveal a weakening US labor market and encourage the Fed to deliver at least one interest rate cut in December, said Jim Wyckoff, senior analyst at Kitco Metals.

Private surveys point to a weakening labor market. The US government is set to resume operations after a record-breaking 43-day shutdown, under an agreement that funds federal operations through January 30.

Although the US central bank cut interest rates last month, Fed Chairman Jerome Powell warned that further easing this year was not guaranteed, partly due to a lack of data.

A Reuters poll showed that 80% of economists expect another 25 basis point rate cut at the Fed's December 9-10 meeting. Lower interest rates typically benefit gold, which offers no yield and is often considered a safe haven during periods of economic uncertainty.

Gold's correlation with core macro drivers such as the dollar and real yields has weakened significantly over the past two weeks, reflecting a shift toward structural themes such as currency devaluation and US debt concerns, Standard Chartered said in a note.

Elsewhere, spot silver edged down 1.1% to $52.83 an ounce after hitting its highest level since October 17 earlier in the session. "If silver doesn't surge significantly, we could see another wave of profit-taking - expect volatility to remain high in the near term," said Tai Wong, an independent metals trader. Platinum fell 1.9% to $1,585.10 and palladium fell 1.2% to $1,456.50.(alg)

Source: Reuters