Gold Rises for Five Consecutive Days Amid Optimism Over Fed Rate Cuts and Concerns of US Government Shutdown

Gold has maintained its stability following a five-day rally that pushed prices to consecutive record levels, coinciding with the beginning of a US government shutdown. Traders are raising their forecasts for Federal Reserve interest rate cuts due to disappointing private payroll data.

The bullion was trading at around $3,860 per ounce, roughly $35 shy of the peak reached on Wednesday. The interruption in federal operations is expected to hinder crucial economic data essential for the Fed’s rate-setting decisions. As a result, economists, traders, and policymakers are increasingly reliant on non-government data, including a recent ADP Research report indicating a substantial decrease in private-sector payrolls for September.

The non-farm payroll data that was set to be released on Friday will be delayed due to the shutdown, which may heighten pressure on the dollar. Consequently, traders have increased their expectations that the Fed will implement two additional rate cuts this year to support a weakening labor market. Lower borrowing costs generally boost the allure of non-yielding gold, making it more accessible for many buyers in a weaker dollar environment.

This precious metal has risen by 47% this year, positioning it for the most significant annual increase since 1979. This surge has been driven by central bank purchases and a rise in investments in gold-backed exchange-traded funds as the Federal Reserve has resumed cutting interest rates.

Bloomberg data indicates that September recorded the highest monthly ETF inflows in three years. Furthermore, Chinese investors have been acquiring more gold-backed funds, with the top four funds witnessing inflows last month after a phase of diminished demand.

Gold has drawn safe-haven demand as concerns about the Fed’s independence grow. On Wednesday, the US Supreme Court rejected President Donald Trump’s attempt to swiftly remove Fed Governor Lisa Cook, who is pursuing a lawsuit to maintain her position, representing a setback in his efforts to exert more influence over the central bank.

As of 8:10 a.m. in Singapore, spot gold decreased by 0.2% to $3,859.22 an ounce after closing 0.2% higher on Wednesday. The Bloomberg Dollar Spot Index remained steady. Silver experienced a decline after reaching its highest price in 14 years during the previous session, while platinum and palladium also saw decreases.

© 2025 Bloomberg

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