Gold prices traded around the key US$4,000 mark during Friday's Asian deals, supported by renewed safe-haven demand as investors weighed signs of a weakening United States labour market and the potential for a Federal Reserve rate cut in December.
By 4 pm AEDT (5 am GMT), spot gold rose 0.5% to US$3,998.42 per ounce, following Thursday’s modest declines of 0.1%.
Investors are now awaiting the preliminary release of the University of Michigan’s consumer sentiment index for fresh insight into the health of the U.S. economy.
The U.S. dollar paused its recent decline, as risk-off sentiment in equity markets offset the dampening effect of the ongoing government shutdown and signs of labour market weakness.
Data from Challenger, Gray & Christmas released on Thursday showed a 183.1% month-on-month surge in announced layoffs, marking the worst October for job cuts in more than two decades.
The grim figures reignited fears of a cooling U.S. economy and boosted expectations for a Fed rate cut next month to 69%, up from 62% earlier in the week, according to the CME Group FedWatch Tool.
Falling U.S. Treasury yields also lent support to gold, helping prices stabilise above a key resistance zone on Thursday.
With no major economic releases scheduled due to the government shutdown, traders expect gold’s near-term momentum to hinge on private-sector indicators and overall market sentiment.
