(Bloomberg) — Gold prices increased on Friday, marking a seventh consecutive weekly rise as anxiety surrounding the US government shutdown fueled investor uncertainty regarding the Federal Reserve’s approach to monetary easing.
The precious metal remained above $3,885 per ounce, only about $12 shy of the record high achieved on Thursday. Despite this rapid increase, gold appears susceptible to corrections, as technical metrics indicate that it has been hovering in overbought territory for an extended period.
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As the US government shutdown delays the payroll report due Friday, investors are turning to private sector data for vital insights into a challenging economic landscape. This disruption may hinder central bank officials’ ability to assess economic trends, as noted by Fed Bank of Chicago President Austan Goolsbee. Currently, money markets nearly fully anticipate a 25 basis point rate cut by the end of the month, with an additional cut expected in December. Lower interest rates typically support non-yielding assets like gold.
Gold’s value has surged approximately 48% this year, experiencing record highs throughout, and it is poised for its largest annual increase since 1979. This demand has been driven by central bank purchases and a rise in gold-backed exchange-traded funds as the Fed resumes rate reductions.
Spot gold was trading at $ an ounce in New York. The Bloomberg Dollar Spot Index saw a decline. Silver increased by 2.1% to $47.9655 per ounce, with platinum and palladium also climbing.
–Assisted by Preeti Soni, S’thembile Cele, and Veena Ali-Khan.
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