Gold prices retreated slightly in Asian trade Friday, trimming part of their weekly gains as investors favored risk-driven assets over traditional havens. Spot gold fell 0.3% to $3,847.27/oz, while December futures held steady at $3,871.12/oz. Earlier this week, bullion touched a record high of $3,897.20/oz.
Global equities remained buoyant on optimism over artificial intelligence and expectations of further Federal Reserve rate cuts. Wall Street indexes closed at record levels, limiting demand for havens like gold despite lingering political uncertainty from the U.S. government shutdown.
Other precious metals also softened:
- Platinum: down 0.6% to $1,567.97/oz
- Silver: flat at $47.00/oz (still up 2.3% for the week)
Gold, however, is on pace for a 2.2% weekly gain, extending its rally to seven consecutive weeks.
Shutdown, Data Delays Keep Traders Cautious
The ongoing U.S. government shutdown, which has suspended the release of official September nonfarm payrolls, kept markets leaning on private indicators for labor data. Investors largely shrugged off the short-term economic risks from the shutdown, pointing to historical evidence that such events rarely derail financial markets.
Instead, attention shifted to weaker private employment readings:
- ADP payrolls (Sept): showed a sharp decline in private sector jobs
- Challenger job cuts: reported continued layoffs, though at a slower pace
- ISM Manufacturing PMI: improved slightly to 49.1, but still in contraction
The absence of official labor figures heightened the importance of these reports, which reinforced expectations of additional Fed easing.
Markets Eye October Rate Cut
Traders see the Federal Reserve’s next move as all but certain. According to the CME FedWatch Tool, markets are pricing in a 99.3% chance of a 25-basis-point rate cut in October, following last month’s reduction.
- September cut: 25 bps, citing labor market risks
- October outlook: nearly assured, though sticky inflation remains a concern
- Fed debate: some officials caution against over-cutting with inflation still above 2%
While gold remains supported by easing bets, persistent strength in equities and risk assets is tempering haven demand. Analysts suggest bullion’s trajectory will depend on how quickly the Fed balances its dual mandate of price stability and labor support amid a politically charged environment.