Gold poised for seventh weekly rise on Fed rate-cut hopes

Gold held steady on Friday (Oct 3) and was set for a seventh straight weekly gain, buoyed by expectations of further US interest rate cuts this year and worries over the impact of a US government shutdown.

Spot gold was little changed at US$3,851.48 per ounce, as at 9.25 am, after hitting an all-time high of US$3,896.49 on Thursday. Bullion has risen 2.5 per cent so far this week.

US gold futures for December delivery gained 0.2 per cent to US$3,875.50.

The US government shutdown extended to a second day on Thursday, potentially delaying key economic data releases, including the closely watched non-farm payrolls (NFP) report due on Friday.

Federal Reserve Bank of Dallas President Lorie Logan said that the US central bank appropriately took out some insurance against any sharp deterioration in the labour market with its rate cut last month, but needed to be “cautious” with any further easing.

However, markets are pricing in a near-certain 25 basis-point cut to the Fed’s key interest rate this month, according to the CME FedWatch tool.

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Gold, often used as a safe store of value during times of political and financial uncertainty, thrives in a low interest rate environment. Bullion has risen 47 per cent so far this year.

The Perth Mint’s gold product sales in September jumped 21 per cent from the previous month, while silver sales rose to a five-month high, the refiner said on Friday.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.31 per cent to 1,015.74 tonnes on Thursday from 1,018.89 tonnes on Wednesday.

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Elsewhere, spot silver slipped 0.4 per cent to US$46.79 per ounce, platinum fell 0.3 per cent to US$1,563.86 and palladium gained 0.2 per cent to US$1,243.41. REUTERS