Gold prices slipped in Asian trading on Friday, trimming part of their weekly gains. Appetite for risk-driven assets stayed firm, even as the U.S. government shutdown continued.
Strong optimism around artificial intelligence and expectations of more U.S. interest rate cuts boosted risk sentiment this week. Wall Street indexes hit fresh record highs, limiting demand for traditional safe havens. Gold advanced earlier in the week, but weakening haven demand capped its rally.
Spot gold fell 0.3% to $3,847.27 an ounce. Gold futures for December delivery held at $3,871.12 per ounce by 01:06 ET (05:06 GMT). Spot prices had touched a record $3,897.20 earlier in the week.
Risk appetite limits gold demand
Demand for safe-haven assets like gold was dampened as global equities gained. Investors showed little concern over the near-term effects of the U.S. government shutdown, pointing to the limited market impact of past shutdowns.
Expectations of lower U.S. interest rates further fueled risk-taking. Private labor market reports highlighted ongoing weakness, raising bets on more Federal Reserve easing. With official nonfarm payrolls data delayed, markets placed extra weight on private employment numbers.
Other precious metals mixed
Precious metals saw mixed performance. Spot platinum fell 0.6% to $1,567.97 an ounce, while spot silver steadied at $47.0025. For the week, silver was up 2.3%, while platinum traded flat.
Gold was still on track for a 2.2% weekly rise, its seventh straight week of gains. Investors remain confident the Fed will continue cutting rates through 2025.
Markets eye October Fed cut
Weak private labor data reinforced expectations of another Fed rate cut in October, following September’s 25 basis point move.
CME FedWatch showed markets pricing in a 99.3% chance of an additional 25 bps cut at the end-October meeting. Challenger job cuts pointed to continued downsizing in September, though at a slower pace, while ADP payrolls showed a sharp drop.
The Fed has cited labor market risks as a reason for easing. However, some officials remain cautious about further cuts given persistent U.S. inflation.
