Gold prices steadied near the US$4,000 mark in Asian trade on Monday, as investors awaited key United States manufacturing data while weighing the economic fallout from the ongoing federal government shutdown.
By 3:50 pm AEDT (4:50 am GMT), spot gold was trading flat at US$4,004.90 per ounce.
Investor sentiment remained cautious amid mounting concerns that the shutdown could become the longest on record, prompting renewed flows into traditional stores of value such as gold. The U.S. dollar paused its recent rally, further supporting bullion prices.
Weak economic data from China also dampened risk appetite. The private RatingDog China General Manufacturing PMI, compiled by S&P Global, fell to 50.6 in October from 51.2 in September, missing forecasts of 50.9 and signalling softer factory activity in the world’s second-largest economy.
Meanwhile, geopolitical tensions resurfaced after U.S. President Donald Trump said he plans to block China’s access to Nvidia’s most advanced semiconductor technology, according to CBS' “60 Minutes”.
His remarks risk reigniting trade friction just days after his meeting with Chinese President Xi Jinping at the APEC Summit in South Korea, which had briefly eased tensions.
The cautious tone comes ahead of the release of the U.S. ISM Manufacturing PMI, which traders are watching closely in the absence of official government statistics during the shutdown.
The data could provide new clues on the health of the U.S. economy following last week’s modest interest rate cut by the Federal Reserve.
According to the CME Group FedWatch Tool, markets are now pricing in a 69.3% chance of a 25-basis-point rate cut in December, down from 91.7% a week earlier.
