Gold prices rose in early Wednesday trading, benefiting from increased demand for safe-haven assets and approaching the key $4,000 level. Investors have turned back to the precious metal mid-week, prompting a rebound amid growing risk aversion in financial markets. Fears of an AI-driven bubble continue to dominate investors’ attention, as an increasing number of influential voices raise the possibility of a correction in stock prices. Also lending support to bullion is the ongoing US government shutdown, which has delayed the release of key economic data and heightened uncertainty. However, the upside for gold remains capped by the strength of the US dollar. The hawkish stance of Federal Reserve Chair Jerome Powell continues to cast doubt on the likelihood of an interest rate cut in December. These doubts have supported the greenback and pushed Treasury yields higher, weighing on the non-yielding metal. Against this backdrop, traders will closely monitor the release of US ADP employment figures and the Services PMI later today, which could provide further insight into the state of the US economy and influence expectations for Fed rate cuts — and, consequently, gold prices.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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