The prolonged U.S. government shutdown has delayed key economic data releases such as employment and inflation figures. This uncertainty, coupled with weaker private-sector job data, has strengthened bets on another potential Federal Reserve rate cut in December.
According to analysts from ING, “The absence of official data is clouding the situation, but private business surveys suggest the Fed may ease policy rates despite recent hawkish signals.”
Futures markets now price in nearly a 70% chance of a rate cut next month up from 60% just a day ago. Lower interest rates generally benefit gold, which yields no interest but retains its value as a store of wealth.
Analysts Maintain Long-Term Bullish View
Despite gold retreating slightly from last month’s record highs, BCA Research analysts believe the metal’s long-term fundamentals remain robust. The firm said the recent 10% correction in gold prices was “mostly behind us,” emphasizing gold’s enduring role as a hedge against monetary instability.
“Gold acts as an insurance asset in a fiat monetary system its value reinforced by investor trust and central bank behavior,” said Dhaval Joshi, lead strategist at BCA Research.
BCA identified three core factors driving gold’s long-term value: global wealth accumulation, allocation to insurance assets, and limited alternatives that offer similar security.
Other Metals Also Gain as Dollar Weakens
Silver futures rose 1% to $48.42 per ounce, while platinum gained 1.6% to $1,562.10. Copper futures on the London Metal Exchange advanced 0.6% to $10,743.20 per ton, supported by improved sentiment in industrial metals.
However, data from China showed exports unexpectedly fell in October the first decline in 18 months reflecting the impact of ongoing trade tensions and cooling global demand.
Experts believe that while industrial demand may face headwinds, gold’s resilience and its perception as a crisis hedge will likely sustain investor interest through year-end.