Gold prices surged above the critical $4,000 per ounce threshold on Thursday, buoyed by a decline in the U.S. dollar and ongoing concerns about the prolonged government shutdown impacting the economic landscape. Spot gold saw an increase of 0.6%, reaching $4,007.38 per ounce by 1044 GMT, while U.S. gold futures for December delivery also climbed 0.6%, settling at $4,017.20 per ounce.
Analyst Giovanni Staunovo from UBS attributed the uptick in gold prices to skepticism from the U.S. Supreme Court regarding the legality of President Donald Trump’s tariffs, alongside a slight retreat of the dollar, which fell 0.3% after achieving a four-month high in the previous session. This dollar decline makes gold less expensive for buyers holding other currencies, thereby boosting demand.
The Supreme Court’s deliberations on tariffs have broader implications for the global economy, contributing to investor unease. Meanwhile, the private sector showed resilience as U.S. employers added 42,000 jobs in October, significantly surpassing Reuters’ prediction of an additional 28,000 jobs. This unexpectedly positive labor market data could dampen hopes for further interest rate cuts.
The ongoing congressional stalemate has resulted in the longest U.S. government shutdown in history, leading both investors and the Federal Reserve to depend heavily on private sector indicators for economic insight. Despite a recent interest rate cut by the Fed, Chair Jerome Powell indicated that it might mark the final reduction until 2025. As a result, market expectations for a further rate cut in December have shifted, now estimating a 63% chance compared to over 90% the previous week. Gold, traditionally viewed as a non-yielding asset, tends to perform well in low-interest-rate conditions.
In other market movements, European stocks experienced a downturn, primarily influenced by losses in France’s Legrand, which fell short of sales growth expectations. This slip has heightened concerns regarding the already elevated valuations in technology-related sectors.
Additionally, other precious metals also saw price fluctuations, with spot silver rising 1.3% to $48.66 per ounce, platinum holding steady at $1,562.19, and palladium dipping by 0.4% to $1,413.86.
