Gold Stabilizes After Decline Amid Uncertainty Over U.S. Interest Rate Path

SadaNews - Gold opened trading on Friday stable after its first decline in five days, with expectations diminishing that a return of the U.S. government from shutdown would be followed immediately by a rate cut.

The precious metal traded around $4,175 per ounce, after ending the previous session down 0.6%. So far, Federal Reserve officials have not shown a strong conviction regarding the need for a new reduction in borrowing costs.

Decline in Rate Cut Bets

Currently, investors do not appear convinced that the accumulation of official data delayed after the longest government shutdown in U.S. history will reveal enough weakness to justify a rate cut.

Swap traders are pricing in a roughly 50% chance of a cut in December, down from 72% a week ago. Generally, high interest rates are negative for gold as it is a non-yielding asset.

Gold rose by 0.2% to $4,178.03 per ounce by 7:17 AM Singapore time. The Bloomberg Dollar Index ended the previous session on a decline, and both silver and platinum gained slightly.