Gold settles near a record high
The global gold markets are witnessing a state of stability at record levels, as the ounce traded near 3,865 dollars on Thursday, after hitting historic levels at 3,895 dollars in yesterday's trading on Wednesday.
This rise is driven by a strong combination of expectations of continued US interest rate cuts and growing demand for safe havens amid the uncertainty created by the government shutdown in the United States.
Economic drivers of growth
Weak employment data and interest expectations
Recent weak economic data have supported expectations that the Federal Reserve will continue to cut interest rates this year, which in turn enhances the attractiveness of gold as a non-yielding asset.
Private sector jobs fell yesterday, represented by the ADP report that the US economy lost 32,000 jobs in September, recording the first consecutive monthly decline since 2020 and the largest decline since March 2023, reflecting the fragility of the labor market.
The government shutdown also postponed the publication of the September NFP non-farm payrolls report, which is one of the main indicators on which the Fed relies in its decisions.
With these indicators, traders see an almost certain probability of a 25 basis point interest rate cut at the current October meeting.
Government shutdown and the demand for safe haven
The partial government shutdown in the United States has sharpened conservative sentiment among investors, pushing them towards safe havens such as gold to preserve value in times of political and financial turmoil.
This partisan gridlock led to a partial government shutdown, putting thousands of federal jobs at risk.
On the other hand, the Supreme Court has decided to prevent President Trump from firing Lisa Cook, a member of the Federal Reserve, and this may ease concerns about the independence of the Federal Reserve and the possible appointment of another board member inclined to quantitative easing policy.
Expectations of gold reaching 4000 dollars
Under such a supportive environment, the forecasts of many analysts are oriented to the continuation of the upward momentum of the precious metal.
There are expectations that the ounce will rise to reach the level of 4000 dollars before the end of this year 2025.
