Gold prices saw an increase on Monday, bolstered by expectations of another interest rate cut by the Federal Reserve in December, coupled with a range of disappointing economic data that raised worries about global growth. Spot gold rose by 0.7% to $4,027.88 per ounce as of 0115. Gold futures in the U.S. for December delivery rose by 0.7%, hitting a price of $4,036.60 per ounce. In October, the U.S. economy saw a decrease in employment, mainly because of cuts in the government and retail sectors. At the same time, the adoption of cost-reduction strategies and the incorporation of artificial intelligence by businesses led to a significant rise in reported layoffs, according to recent data.

In early November, U.S. consumer sentiment fell to its lowest level in nearly three and a half years, highlighting worries about the economic impact of the unusually long U.S. government shutdown, as reported in a survey published on Friday. Currently, market participants estimate a 67% chance of a rate cut by the Federal Reserve in December, according to the reports. Gold, known for not generating interest, usually shows strong performance in settings marked by low interest rates and times of economic instability. On Sunday, the U.S. Senate appeared poised to move forward with a plan aimed at reopening the federal government and ending a 40-day shutdown that has rendered federal workers idle, delayed food assistance, and caused disruptions in air travel.

Global shares saw an increase in Asia, driven by hope for a possible resolution to the ongoing U.S. government shutdown, while the dollar continued to face challenges from losses sustained last week. SPDR Gold Trust, the leading gold-backed exchange-traded fund worldwide, announced a rise in its holdings by 0.16%, totaling 1,042.06 tonnes on Friday, an increase from 1,040.35 tonnes on Thursday.

Last week, physical gold demand in India showed a lackluster trend, with fluctuating prices deterring buyers and prompting dealers to offer considerable discounts to entice them. At the same time, demand in China saw a drop because of changes in tax laws. Elsewhere, spot silver increased by 1.1% to $48.84 per ounce, platinum climbed 1.2% to $1,563.25, and palladium gained 1.2% to $1,396.75.