Gold prices rose in early Wednesday trading, approaching $4,100 as concerns over the fallout from the US government shutdown continue to fuel increased safe-haven demand. This sentiment is echoed more broadly across the markets, triggering a downturn in risk appetite and intensifying fears of a potential bubble in equity markets — a dynamic that is helping to keep gold prices supported. However, the precious metal is also facing headwinds as expectations of a Federal Reserve rate cut in December have cooled, following a series of remarks from senior FOMC officials adopting a cautious stance and showing little enthusiasm for lowering borrowing costs at the year’s final monetary policy meeting. Against this backdrop, the price of gold is likely to remain range-bound until tomorrow’s release of the delayed September non-farm payrolls. After an extended period without key data, traders will be scrutinising the figures, which are likely to influence the Fed’s decision-making, impact the US dollar, and — due to the inverse correlation — affect gold prices.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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