Gold gains on softer dollar, increasing bets of Fed rate cut
GOLD rose on Friday as the dollar slid after private-sector job reports indicated weakness in the US labour market increasing expectations of another Federal Reserve interest rate cut, while a prolonged government shutdown also boosted safe-haven demand.
Spot gold gained 0.5 per cent to US$3,996.72 per ounce by 0137 GMT. US gold futures for December delivery was up 0.3 per cent at US$4,004.40 per ounce.
The dollar retreated in early Asia trade, leading declines among major currencies, as investors lacking official data on the US labour market, seized upon signs of weakness in private sector surveys.
Meanwhile, benchmark US 10-year yields fell from a one-month high hit on Thursday. The Fed cut interest rates last week and Chair Jerome Powell suggested it might be the last reduction in borrowing costs for the year.
The US economy shed jobs in October amid losses in the government and retail sectors, while cost-cutting and the adoption of artificial intelligence by businesses led to a surge in announced layoffs, data showed on Thursday.
A weak jobs market typically makes interest rate cuts more likely.
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Market participants now see a 69 per cent chance of a Fed rate cut in December, up from close to 60 per cent in the previous session. A congressional impasse has resulted in what is now the longest-ever US government shutdown, which has forced investors and the data-dependent Fed to rely on private sector indicators.
Non-yielding gold tends to do well in a low-interest-rate environment and during times of economic uncertainty.
Bullion has fallen close to 8 per cent after hitting a record high of US$4,381.21 on Oct 20.
Major stock indexes fell sharply, with technology and consumer discretionary shares leading losses in the S&P 500.
Elsewhere, spot silver firmed 0.6 per cent to US$48.26 per ounce, platinum slid 0.6 per cent to US$1,532.09 and palladium rose 0.5 per cent to US$1,380.91. REUTERS
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