Gold Holds Steady, Poised for Seventh Straight Weekly Gain
Gold prices were stable on Friday, on track to complete their seventh consecutive weekly rise. This rally is being fueled by market expectations of further U.S. interest rate cuts and growing concerns over the economic fallout from a prolonged government shutdown.
Price Movement and Rate Expectations
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Spot gold edged up 0.03% to $3,857.25 per ounce (after hitting a record high of $3,896.49 the day before) and has gained 2.6% this week.
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The market is highly confident the Federal Reserve will cut rates soon, with investors pricing in a 97% chance of a quarter-point rate cut in October and an 88% chance of another similar cut in December.
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A key factor supporting gold is the anticipation of lower rates, as the yellow metal tends to perform well in a low-interest-rate environment. One analyst from UBS predicts gold will breach the $4,000 per ounce mark by the end of the year.
Economic and Political Uncertainty
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The ongoing U.S. government shutdown, now in its third day, has delayed the release of crucial economic reports, including the non-farm payrolls data.
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Available alternative data suggests the U.S. job market remained stalled in September, reinforcing the argument for the Federal Reserve to cut rates.
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Gold is often seen as a safe haven investment during times of political and financial uncertainty, a role it is currently playing. Bullion has already risen 47% this year.
Other Metals and Demand
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Physical gold demand in India actually rose this week despite the record-high prices.
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Other precious metals also saw gains: spot silver rose 0.6%, platinum climbed 0.5%, and palladium increased 1.4%.
