New Delhi: Gold prices advanced slightly on Thursday as the U.S. dollar softened and investors grew increasingly anxious over the ongoing U.S. government shutdown the longest in American history. The uncertainty surrounding the world’s largest economy has once again highlighted gold’s role as a traditional safe-haven asset.
In early trade, spot gold rose by 0.1 percent to US$3,986.23 per ounce, while U.S. gold futures inched up to US$3,994.60. The movement came as the U.S. dollar index retreated from its recent four-month highs, making gold more attractive for investors holding other currencies.
Market analysts said the weakening of the dollar has eased pressure on the bullion market, allowing gold to gain mild upward momentum. “The dollar has nudged a bit lower this week, which has made the task easier for gold in terms of gaining traction to the upside,” observed Tim Waterer, Chief Market Analyst at KCM Trade.
The continuing shutdown of the U.S. federal government has shaken investor confidence. The political impasse in Washington has suspended several economic data releases, forcing traders and analysts to rely on private reports to gauge the health of the economy. The prolonged closure has sparked concerns about potential economic slowdown and its ripple effects across global markets.
Adding to the mix, a recent report from the private sector indicated that U.S. employers added 42,000 jobs in October, exceeding forecasts of 28,000. While stronger employment figures typically point to economic resilience, they also raise doubts about the Federal Reserve’s willingness to continue cutting interest rates a development that could weigh on gold in the long term.
Last week, the Federal Reserve delivered what could be its final rate cut of the year, as Chair Jerome Powell signaled a cautious stance on further monetary easing. The probability of another rate reduction in December has now slipped to around 63 percent, compared to more than 90 percent just a few weeks ago.
Gold, which does not yield interest, tends to benefit when rates are low or when uncertainty clouds the economic outlook. Analysts believe that as long as the shutdown continues and concerns over U.S. fiscal management persist, investors may continue to park funds in the yellow metal as a hedge against volatility.
While gold saw modest gains, other precious metals moved in varied directions. Silver climbed 0.3 percent to US$48.22 per ounce, while platinum slipped 0.7 percent to US$1,550.91. Palladium, meanwhile, edged up 0.2 percent to US$1,422.23 per ounce.
These fluctuations reflect broader uncertainty in the commodities market, as investors weigh the impact of the U.S. shutdown, slowing global trade, and volatile energy prices.
In India, one of the world’s largest consumers of gold, global price trends often directly influence domestic rates. The weakening dollar could slightly reduce import costs, but local prices remain subject to fluctuations in the rupee-dollar exchange rate and import duties.
With the festival and wedding season underway, jewellers are expecting steady consumer demand, though the elevated global prices could limit bulk buying. Financial analysts note that Indian investors, too, are turning to gold as a safeguard amid geopolitical tensions and global economic headwinds.
As the U.S. political standoff shows little sign of resolution, markets remain on edge. A prolonged shutdown could dampen growth and fuel safe-haven demand, while any clarity from the Federal Reserve might shift short-term momentum.
For now, gold’s gradual climb underscores a broader theme: investors are hedging their bets against an uncertain global landscape one where fiscal gridlock, inflationary fears, and policy ambiguity continue to shape financial sentiment worldwide.
Gold’s modest rise reflects the tug-of-war between optimism over U.S. job data and anxiety over political dysfunction. As the dollar weakens and global uncertainty persists, the yellow metal may continue to glimmer not through dramatic surges, but through steady resilience amid stormy economic skies.