Gold Gains on Safe-Haven Demand and Fed Cut Hopes by Amit Gupta, Kedia Advisory
Gold prices extended gains on Friday, buoyed by renewed safe-haven demand and growing expectations of another Federal Reserve rate cut in December. Concerns over the prolonged U.S. government shutdown and legal uncertainty surrounding President Trump’s tariffs weakened risk sentiment, driving investors toward the yellow metal. Data indicating U.S. job losses and a softening labor market further strengthened the case for policy easing, adding to gold’s appeal. However, a modest U.S. Dollar recovery capped sharp upside movement. Overall, the combination of economic uncertainty and rate cut bets continues to provide strong underlying support for gold prices.
Key Highlights
* Gold rises as investors seek safety amid market uncertainty.
* Prolonged U.S. government shutdown fuels economic concerns.
* Weak U.S. jobs data increases chances of a Fed rate cut.
* Uncertainty over Trump’s tariffs adds to safe-haven demand.
* Slight U.S. Dollar rebound limits gold’s upward momentum.
Gold prices gained further traction on Friday, trading near the $4,000 psychological mark as investors turned to safe-haven assets amid mounting global uncertainty. The yellow metal attracted fresh buying interest after a brief pullback, supported by persistent concerns surrounding the U.S. government shutdown and doubts over the legality of President Donald Trump’s tariff policies.
The ongoing government shutdown, now entering its 38th day, has heightened fears of an economic slowdown. The Congressional Budget Office estimates that the shutdown could shave up to 2% off U.S. GDP in the fourth quarter. With no resolution in sight, safe-haven demand remains strong. Additionally, the U.S. Supreme Court’s scrutiny of Trump’s tariff powers has amplified legal and political uncertainty, further underpinning bullion prices.
Weak labor market data has added another supportive factor for gold. A private survey revealed significant job losses in October, with both private and government payrolls declining. According to the CME FedWatch Tool, markets are now pricing in a 67% probability of another Fed rate cut in December, up from 60% last week. Lower interest rates typically enhance gold’s appeal as a non-yielding asset.
However, the metal’s advance faced some resistance due to a mild recovery in the U.S. Dollar, as traders engaged in dip-buying. Still, the broader market sentiment remains in favor of the bulls, with gold benefiting from a fragile risk environment and expectations of monetary easing.
Finally, Gold’s upward momentum remains intact, supported by safe-haven demand, weak U.S. data, and Fed rate cut expectations, despite occasional resistance from a strengthening U.S. Dollar.
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