Gold rises as US shutdown, tariff uncertainty lift safe-haven demand

Gold prices up

Gold prices edged up on Thursday, buoyed by a weaker dollar and a resurgence of safe-haven demand on concerns over a prolonged U.S. government shutdown and uncertainty over the legality of tariffs.

Spot gold was up 0.2% at $3,989.91 per ounce by 1:40 p.m. ET (1840 GMT). U.S. gold futures for December delivery settled little changed at $3,991.

The dollar fell 0.5% after hitting a four-month high in the previous session, making gold cheaper for overseas buyers.

With the U.S. government shutdown and skepticism from U.S. Supreme Court justices on the legality of U.S. President Donald Trump's sweeping tariffs, "we're seeing a revival of the haven bid," said Peter Grant, vice president and senior metals strategist at Zaner Metals.

"(Gold) is on track for a fairly decent close to the year ... I’d say a year-end target in the $4,300 to $4,400/oz range seems reasonable."

The U.S. Federal Reserve cut interest rates for the second time this year last week, with markets anticipating a 72% chance of another cut in December. [/FEDWATCH]

Fed Bank of Cleveland President Beth Hammack said on Thursday ongoing high levels of inflation argue against the U.S. central bank cutting interest rates again.

Gold is considered a hedge during times of uncertainty. The non-yielding asset also benefits in low-interest rate environments.

Traders remain cautious, watching for fallout from U.S. President Donald Trump’s trade policies and risks tied to a prolonged U.S. government shutdown.

"It would surprise us were gold to stay rangebound around $4,000/oz as speculative capital exits, with central bank buying remaining the primary positive tailwind going forward," SP Angel said in a note.

Elsewhere, spot silver added 0.3% to $48.22 per ounce, platinum was down 1.8% at $1,533.93, and palladium fell 2.7% to $1,381.18.