Gold prices hovered near three-week highs during Tuesday's Asian session, supported by renewed expectations of a United States rate cut and optimism over a potential resolution to the government shutdown.
By 3:15 pm AEDT (4:15 am GMT), spot gold rose 0.6% to $4,140.69 per ounce, extending a 3% rally so far this week.
The metal has gained momentum as investors bet that the reopening of the U.S. government will lead to the release of delayed economic data, potentially confirming that the Federal Reserve will lower interest rates in December.
According to the CME Group FedWatch Tool, markets currently price in a 63.5% chance of a cut next month.
Recent economic figures have reinforced dovish sentiment. The University of Michigan’s Consumer Sentiment Index dropped to 50.3 in early November, its lowest level in nearly three and a half years, while Challenger, Gray & Christmas reported a 183.1% monthly surge in corporate layoffs last week.
Despite U.S. Treasury yields and equities also advancing on signs the shutdown may end soon, gold’s safe-haven appeal has remained intact.
