Gold prices hovered near record highs in Asian trading on Thursday, supported by safe-haven demand as the U.S. government shutdown continued and expectations for Federal Reserve rate cuts increased.
The precious metal reached new peaks earlier this week after Congress failed to pass a spending bill, forcing the government to shut down. The closure is delaying the release of key labor market data, leaving traders uncertain about the Fed’s policy outlook.
Spot gold was steady at $3,864.63 per ounce, while December gold futures slipped 0.2% to $3,889.65 by 00:45 ET (04:45 GMT). On Wednesday, spot prices reached a record high of $3,895.33.
U.S. Shutdown to Delay Payrolls Data
The U.S. government is expected to stay shut for at least three days, disrupting federal services nationwide. Lawmakers in the Senate have made little progress toward approving a new spending plan.
A prolonged shutdown risks harming the U.S. economy and labor sector, especially as President Donald Trump warned of potential federal job cuts. Nonfarm payrolls data, originally scheduled for release on Friday, is now expected next week.
Private payroll data released Wednesday pointed to further weakness in the labor market, reinforcing optimism for more Fed rate cuts. This pressure weighed on the dollar and boosted demand for precious metals.
Precious and Industrial Metals
Other metals eased slightly after strong gains this week. Spot platinum traded at $1,563.46 per ounce, while palladium slipped 0.2% to $47.2535. Both had surged to 10-year highs earlier in the week.
Among industrial metals, benchmark copper futures on the London Metal Exchange rose 0.4% to $10,422.05 per ton, while COMEX copper futures climbed 0.4% to $4.9145 per pound.
Rate Cut Expectations Rise
Markets are now pricing in a 97% chance of a 25-basis-point Fed cut in late October, according to CME FedWatch. There is also a small 3% probability of a larger 50-basis-point move.
Recent data showed steady cooling in the U.S. economy, with labor market weakness adding to concerns. The Fed already cut rates by 25 basis points in September. However, officials have warned that persistent inflation could limit further easing. The PCE price index, the Fed’s preferred inflation measure, rose in August as expected, with core inflation still above the 2% target.
