Gold prices gained on Friday as the US dollar weakened, with traders betting that slowing labor market conditions could prompt another interest rate cut by the Federal Reserve in December. The precious metal also drew support from safe-haven demand as the ongoing US government shutdown weighed on investor confidence.
Spot gold rose 0.4 percent to 3,994.03 dollars per ounce as of 0341 GMT, though it remained on track for a modest weekly loss of 0.3 percent. US gold futures for December delivery were up 0.3 percent at 4,004.40 dollars per ounce. Despite the day’s rise, bullion has fallen nearly 8 percent since reaching a record high of 4,381.21 dollars on October 20.
Analysts said the latest movement in gold reflected both macroeconomic uncertainty and shifting expectations on US monetary policy. Data released Thursday showed that the US economy lost jobs in October, with declines in the government and retail sectors. Businesses also announced a wave of layoffs, citing cost-cutting measures and growing adoption of artificial intelligence to streamline operations.
“The private jobs data is still indicating that a rate cut in December is likely, and that’s why gold prices are getting some kind of support,” said Soni Kumari, a commodity strategist at ANZ. She added that the ongoing political gridlock in Washington has further boosted demand for safe-haven assets.
The dollar slipped against major currencies during Asian trading, extending its decline after the weaker employment data. Investors interpreted the figures as a sign that the Federal Reserve might take a more dovish stance to cushion the economy. A soft labor market often increases the likelihood of interest rate reductions, which tend to make non-yielding assets like gold more attractive.
According to CME FedWatch data, market participants now assign a 69 percent probability of a rate cut in December, up from about 60 percent the previous day. The Federal Reserve reduced rates last week, and Chair Jerome Powell indicated it could be the final cut of the year, but markets continue to anticipate further easing if economic conditions deteriorate.
The ongoing government shutdown has added another layer of uncertainty. With federal agencies partially closed, key official data releases have been delayed, forcing investors and policymakers to rely more on private sector indicators. The stalemate, now the longest shutdown in US history, has unsettled markets and increased demand for safe-haven assets such as gold.
“Focus now is on how long the shutdown will continue and how it might affect upcoming macro data,” said Kumari. “This uncertainty, combined with the prospect of lower rates, is helping to keep gold supported.”
In other precious metals, spot silver gained 0.7 percent to 48.31 dollars per ounce but was still heading for a 0.7 percent weekly loss. Platinum slipped 0.4 percent to 1,534.21 dollars, down nearly 2 percent for the week, while palladium rose 0.3 percent to 1,379.33 dollars and was on track for a 0.5 percent weekly gain.
Analysts said that while near-term volatility may persist, gold remains underpinned by expectations of monetary easing and concerns over the global economic outlook. For many investors, it continues to serve as a hedge against both policy uncertainty and weakening growth momentum.
