Gold Records Near $4,015 Amid Awaiting American Data Due to Government Shutdown

SadaNews - Gold prices recorded close to $4,015 an ounce on Tuesday, following three days of losses driven by fading expectations of an interest rate cut in the United States next month. While investors and policymakers await a slew of delayed data after the longest government shutdown in U.S. history, several Federal Reserve officials warned against any new cut in borrowing costs.

Interest rate swap contracts now show less than a 50% chance of a rate cut in December, down from pricing nearly a quarter-point cut less than a month ago. This has weakened expectations for gold, which does not yield interest and typically benefits from lower interest rates.

Awaiting U.S. Jobs Data and Its Impact on Gold

The first signs regarding the state of the U.S. labor market will emerge on Thursday when the Bureau of Labor Statistics releases the September jobs report. Although the data will be more reliant on the past than usual, it will help clarify the conditions of the world’s largest economy as Washington exits a six-week shutdown.

Read also: Split Within the U.S. Federal Reserve Threatens December Rate Cut Chances

Despite the recent decline, gold has gained 54% this year and is heading toward its best annual performance since 1979.

Investors have bought the metal as a hedge against rising financial anxiety in several major economies, while high central bank purchases supported gold's rise to a record level above $4,380 last month.

Central Bank Purchases Continue to Support Gold

Analysts at "Goldman Sachs" wrote in a note on Monday that these purchases likely continued in November. They estimated that central banks bought 64 tons in September, more than three times the quantity in August, adding that China alone contributed about 15 tons.

The analysts, including Lena Thomas, stated: "We still observe a high accumulation of gold by central banks as a trend extending over years, as these banks are diversifying their reserves to hedge against geopolitical and financial risks."