Gold pulled back from a high not reached in more than three weeks on Thursday, affected by a rising dollar, as investors looked forward to the release of U.S. economic data to evaluate the direction of Federal Reserve interest rates. Spot gold experienced a decline of 0.1%, trading at $4,194.63 per ounce as of 0203, following a peak not seen since October 21 on Wednesday. Gold futures in the U.S. for December delivery fell by 0.3%, closing at $4,199.30 per ounce. The dollar index continued to strengthen against its counterparts, making gold less attractive for holders of other currencies.
On Wednesday, the House of Representatives moved forward with a procedural measure designed to end the longest government shutdown in U.S. history. The shutdown began on October 1, leading to the halt of crucial economic data releases, including payroll and inflation reports. Analysts suggested that the statistical agency of the U.S. Labor Department should prioritize the creation of the employment and inflation reports for November, thus equipping Federal Reserve officials with the latest data before their policy meeting in December.
Last month, the Fed lowered interest rates by 25 basis points, but Chair Jerome Powell expressed a careful approach towards additional rate cuts this year, partly because of a lack of sufficient data. The U.S. central bank is anticipated to lower its key interest rate by 25 basis points next month to bolster a struggling labor market, as suggested by 80% of economists surveyed, reflecting a slight rise from the previous month’s poll. Non-yielding gold generally does well in situations marked by low interest rates and increased economic uncertainty.
Gold prices have seen an impressive rise of 60% this year, hitting an all-time high of $4,381.21 on October 20. This increase has been fueled by persistent geopolitical and trade conflicts, as well as expectations of possible rate reductions by the Federal Reserve. SPDR Gold Trust, known as the largest gold-backed exchange-traded fund worldwide, announced a rise in its holdings by 0.03%, reaching 1,046.64 metric tons on Wednesday, up from 1,046.36 tons on Tuesday. Elsewhere, spot silver held steady at $53.37 per ounce, platinum saw a minor rise of 0.1% to $1,616.24, while palladium dropped by 0.6% to $1,465.21.