Gold poised for fourth monthly gain on Fed rate-cut optimism

Gold rose 0.3% to $4,171.18 an ounce as of 8:30 a.m. in Singapore.

Gold was steady — and on track for a fourth monthly gain — as signs the Federal Reserve will cut rates next month supported the precious metal.

Bullion was near $4,170 an ounce on Friday, and up more than 2% for the week. A series of comments by Fed officials and the release of delayed economic data have supported the case for lower borrowing costs, which typically benefit gold as it doesn’t pay interest. Swap traders are pricing in a more-than-80% chance of a quarter-point cut in December.

Traders will be digesting every last clue for the next rate decision before the US central bank goes into an external communication blackout starting Saturday. A record-setting government shutdown has delayed key data, and some statistics will not be released at all, making it challenging for the Fed and investors to assess the state of the world’s largest economy.

Bullion has gained nearly every month this year, and is on track for its best annual performance since 1979. Elevated central-bank buying as well as robust non-sovereign inflows to exchange-traded funds supported the metal’s run to a record above $4,380 last month. Investors have piled into alternative assets in a wider retreat from sovereign bonds and currencies.

This month, the precious metal has consolidated above the $4,000-an-ounce level since pulling back from its peak. For the last three weeks, inflows to gold-backed ETFs have been flat, according to Bloomberg calculations.

Gold rose 0.3% to $4,171.18 an ounce as of 8:30 a.m. in Singapore. The Bloomberg Dollar Spot Index was marginally lower. Platinum inched up after jumping 1.6% on Thursday as new futures contracts in China aided demand. Palladium climbed, and silver edged up to within a dollar of a record.