On Wednesday, gold prices saw a modest rise, staying near historic highs as the United States neared a possible government shutdown, boosting demand for safe-haven assets. Moreover, unsatisfactory U.S. labor data heightened expectations for additional rate cuts by the Federal Reserve Spot gold rose by 0.2%, hitting $3,861.22 per ounce, as of 0030. Bullion saw about a 12% rise in September, representing the largest monthly increase for the metal since August 2011. Gold futures in the U.S. for December delivery rose by 0.4%, hitting a price of $3,888.80.
The U.S. Senate failed to pass a bill on Tuesday that would have extended government funding, putting the nation closer to a shutdown, while U.S. President Donald Trump indicated possible additional cuts to the federal workforce. A government shutdown could delay the release of the closely watched non-farm payrolls report set for Friday, which is an important indicator for Federal Reserve policy discussions. The report released on Tuesday showed a modest rise in U.S. job openings for August, alongside a decline in hiring. This indicates a potential easing in labor market conditions, which may result in further interest rate reductions.
Recent economic data has bolstered expectations for Federal Reserve rate cuts, with traders assigning a 97% likelihood to a 25-basis-point reduction at the upcoming October meeting and a 76% likelihood for December. Investors are keeping a close eye on the ADP National Employment Report set to be released later on Wednesday, looking for additional insights into the labor market dynamics. Gold, known as a traditional protection against uncertainty, thrives in a low-interest-rate environment due to its absence of yield. This year, the metal has hit multiple record highs, with the latest peak at $3,871.45 on September 30.
SPDR Gold Trust, the leading gold-backed exchange-traded fund worldwide, announced a rise in its holdings by 0.11%, totaling 1,012.88 tons on Tuesday, an increase from 1,011.73 tons on Monday. Elsewhere, spot silver held steady at $46.64 per ounce, platinum stayed at $1,573.76, while palladium saw a slight decrease of 0.4% to $1,252.25.