Gold edged higher — after notching a sixth weekly gain — as traders weighed a potential US government shutdown that could delay the release of pivotal jobs data this week and potentially cloud the Federal Reserve’s monetary policy path.
Bullion traded near $3,773 an ounce as markets opened on Monday, less than $20 shy of a record-high reached last Tuesday. Prices gained 2% last week as inflows into bullion-backed exchange-traded funds grew and elevated geopolitical tensions, including between Russia and Europe, underpinned haven demand.
Investors will be monitoring a planned meeting between top US congressional leaders and President Donald Trump on Monday — a day before federal funding would expire if an agreement on a short-term spending bill can’t be reached. A shutdown would threaten the release of key data including Friday’s payrolls report, which economists expect would show subdued jobs growth in September.
Weaker employment figures would bolster the case for easing by Fed officials at their next rate decision in October — a scenario that would make non-interest bearing gold more attractive. Still, there’s a high degree of uncertainty over the outlook for the Fed’s cutting cycle, with officials voicing diverging views on monetary policy while some economic data came in stronger than expected.
Traders also continued to weigh threats to the US central bank’s independence, after Fed Governor Lisa Cook’s attorneys on Thursday urged the Supreme Court to let her stay on the job while she fights Trump’s attempt to fire her.
Gold doesn’t look overpriced relative to the dollar and Treasuries, which “ought to contain a level of Fed-related premium, given the nature of the risk” from the central bank’s potential loss of independence, Barclays Plc. strategists including Themistoklis Fiotakis and Lefteris Farmakis said in a note on Sunday. “This makes it a surprisingly good value hedge,” they added.
Gold has soared 44% this year, setting successive peaks on central-bank demand and a resumption of interest-rate cuts by the Fed. Prices are on track to close out a third consecutive quarterly gain next week, with holdings in bullion-backed ETFs at the highest since 2022. Banks including Goldman Sachs Group Inc. and Deutsche Bank AG have said they expect the rally to extend.
Silver, meanwhile, extended gains after rising above $45 an ounce last week for the first time in 14 years. Investors have piled into silver-backed ETFs, drawing down stockpiles of freely available metal in London and leading to persistent tightness in the market. Lease rates — which reflect the cost of borrowing metal, generally for a short period of time — have surged above 5%, well above their normal levels of close to zero.
Spot gold was 0.4% higher to $3,773.11 an ounce as of 8:11 a.m. in Singapore. The Bloomberg Dollar Spot Index edged down 0.1%. Silver rose 0.6% to $46.4715 an ounce, while platinum and palladium gained.
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