By Mohsin Ali
Gold prices surged to new heights on Wednesday as nervous investors rushed to safe-haven assets. Concerns over a possible U.S. government shutdown, along with signs of a weakening job market, fueled expectations that the Federal Reserve will soon cut interest rates.
Spot gold rose 0.99% to $3,867.09 an ounce by 10:26 a.m. PST, according to data from Mettis Global. Meanwhile, U.S. gold futures for December delivery climbed 0.7% to $3,901.40.
The U.S. dollar index slipped near a one-week low, making gold — priced in dollars — more attractive to international buyers.
Why Gold Is Rising
“Gold is being supported by a softer dollar, political tensions over a possible U.S. government shutdown, and broader geopolitical uncertainty,” said Nicholas Frappell, global head of institutional markets at ABC Refinery, in an interview with CNBC.
On Tuesday, the U.S. Senate failed to pass a funding extension bill, raising the risk of a shutdown. Former President Donald Trump also weighed in, calling for further cuts to the federal workforce.
Analysts warn that a shutdown could delay critical economic data, including Friday’s non-farm payrolls report, a key indicator for the labor market.
Signs of a Cooling Job Market
Fresh data showed that U.S. job openings grew only slightly in August, while hiring slowed, pointing to a weakening employment picture.
The softer labor data has increased bets on monetary easing. Traders now see a 97% chance of a 25-basis-point interest rate cut at the Fed’s upcoming meeting, with a 76% chance of another cut in December, according to CME Group’s FedWatch tool.
Investors are also awaiting the ADP National Employment Report later today for more signals about the job market.
Analysts Expect Gold to Keep Rising
“It’s hard to see an immediate end to gold’s rally. We expect further gains in the near term,” said Michael Hsueh, precious metals analyst at Deutsche Bank, as quoted by CNBC.
Gold, which doesn’t pay interest, typically performs well when uncertainty is high and interest rates are low. The metal has already surged more than 47% this year.
Other precious metals joined the rally. Spot silver jumped 1.5% to $47.39 an ounce, its highest in more than 14 years. Platinum gained 1.4% to $1,595.85, while palladium rose 0.9% to $1,267.75.
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