Gold set for seventh weekly gain as US shutdown clouds rate path

Gold headed for a seventh weekly advance, as the US government shutdown added another layer of uncertainty for investors seeking signals on the Federal Reserve’s monetary-easing path.

Bullion held near $3,860 an ounce, after ending Thursday slightly lower as traders booked profits following a five-day rally that pushed prices to a record earlier in the session. The torrid pace of the advance has left gold vulnerable to pullbacks, with technical indicators showing it’s been trading in overbought territory for the past month.

With the US shutdown set to delay Friday’s government payroll report, investors have become reliant on private data for crucial clues about an already murky economic outlook. Figures from outplacement firm Challenger, Gray & Christmas on Thursday showed US employers dialed back hiring plans in September and announced fewer job cuts.

The blackout will also make it harder for central bankers to interpret the economy’s direction, Fed Bank of Chicago President Austan Goolsbee said this week. Money markets are still almost fully pricing a quarter-point cut at the end of the month, and are widely expecting another in December. Lower borrowing costs tend to benefit non-yielding precious metals.