Traders are losing confidence in a December reduction in borrowing costs as Federal Reserve officials signal hesitation. Lower interest rates typically make non-yielding assets like gold more attractive to investors, News.Az reports, citing Bloomberg.
Market participants and policymakers are awaiting a backlog of economic data delayed by the longest U.S. government shutdown in history. The six-week gap in reliable labor market and inflation statistics has made some officials reluctant to commit to a rate cut. Previously, traders had nearly priced in a quarter-point reduction, but uncertainty has now split market expectations for December.
Gold is still up about 55% this year and remains on target for its best annual performance since 1979. A scorching rally to a record high above $4,380 last month has been underpinned by elevated central-bank purchases, while investors have also piled into precious metals as a hedge against growing fiscal unease in some of the world’s biggest economies.
Gold fell 0.5% to $4,063.21 an ounce as of 2:18 p.m. in Singapore. The Bloomberg Dollar Spot Index was up 0.1%. Silver and palladium rose, while platinum also edged up.
