Gold prices rose during Asian trading on Friday as growing uncertainty around the U.S. economy encouraged investors to seek safety in the metal. However, fading expectations of a Federal Reserve interest rate cut in December limited the overall upside.
Gold was also on track for its first weekly increase in four weeks, after reclaiming the $4,000-per-ounce level earlier in the week. Other precious metals traded higher as well.
Spot gold gained 0.4% to $4,187.43 per ounce by 00:24 ET (05:24 GMT), while December gold futures dipped slightly to $4,190.75 per ounce.
Gold Gains Support as Economic Concerns Mount
Spot gold was up roughly 5% for the week, buoyed by safe-haven demand as investors grew more cautious about the U.S. economic outlook.
The nearly 43-day government shutdown ended this week, and official economic reports are expected to resume in the coming weeks. Still, markets worried that the delayed data may reveal deeper economic weakness. U.S. officials also indicated on Thursday that inflation and labor figures for October may never be published due to the shutdown.
Other precious metals strengthened on Friday and remained sharply higher for the week. Spot platinum rose 0.5% to $1,593.83 per ounce, while spot silver jumped 1.1% to $52.8815 per ounce. Silver gained nearly 9% this week, coming close to record levels reached in October.
Rate-Cut Expectations Cool as Fed Faces Limited Data
The lack of updated economic data leaves the Federal Reserve with less clarity ahead of its December meeting, leading traders to scale back expectations of an interest rate cut.
ANZ analysts noted that it may take time for federal agencies to restart normal reporting, which could keep Fed officials cautious. Recent comments from San Francisco Fed President Mary Daly also suggested it was too early to commit to a rate cut.
According to CME FedWatch, markets now see a 45.4% probability of a 25-basis-point cut in December, down from 64.3% the previous week. Meanwhile, expectations for the Fed to hold rates steady rose to 54.6%, up from 35.7% a week earlier.
Despite fewer bets on a cut, the U.S. dollar remained weak as economic concerns overshadowed support from stable interest rate expectations. The dollar was set to lose about 0.4% for the week, helping support precious metal prices.
