WASHINGTON (dpa-AFX) - Gold prices moved to the upside on Wednesday - scaling a new high - with the U.S. government entering a shutdown, which could intensify economic uncertainty along with weaker U.S. employment data released today.
Front Month Comex Gold for October delivery climbed by $26.70 (or 0.70%) to $3,867.50 per troy ounce. Notably, this is a new record high for gold, which has closed higher for five consecutive sessions.
Front Month Comex Silver for October delivery surged by $1.0370 (or 2.24%) to $47.290 per troy ounce. Notably, this is a new 52-week high for silver.
As hectic parleys between Republicans - including U.S. President Donald Trump - and Democrats to pass a funding bill failed, the U.S. has entered a shutdown from today. Democrats have demanded amending healthcare benefits to include extension of Obamacare (Affordable Care Act) tax credits but Republicans have insisted on passing the bill first before negotiating other issues.
In the U.S., the government can spend money only if Congress passes a budget. When lawmakers do not agree in time, agencies run out of funding and must stop 'non-essential' work.
Instead of the usual practice of furloughing, Trump has announced plans to layoff large number of employees during this shutdown.
On the economic front, ADP's private payroll data revealed a loss of 32,000 jobs for the month of September - contrary to forecasts of 50,000 gain - reflecting the biggest decrease since 2023.
This report assumes more significance than usual as a shutdown inhibits the release of non-farm payrolls and jobless claims later this week.
Following the September 17 U.S. Fed rate cut, expectations of additional rate cuts this year and another next year have increased among traders based on projections. However, with no official data to rely on now, the data-driven Fed's economic outlook could be unclear.
However, according to CME Group's FedWatch Tool, investors are betting on a 99.0% chance of a 25-basis-point interest rate cut and a remote 1.0% chance of a 50-basis-point rate cut at the Federal Reserve's October 28-29 meeting.
Weeks before, Russian drones intruded Poland and Russian fighter jets flew over Estonia. Days before, Russian drones were sighted in Denmark's airspace.
While Russia has denied all these, recent events have pressured the European leaders to build a 'drone wall' to shield their countries from any such future Russian incursions.
Speaking to senior commanders at the Marine Corps University in Quantico, Virginia, Trump stated that the premiers of Russia and Ukraine should negotiate directly to end the ongoing war.
Trump also stressed that Hamas militants must agree to the new U.S.-backed 'peace deal' for Gaza.
Ongoing geopolitical tension and prevailing economic uncertainty, within the U.S. and globally, has helped gold prices on the upside.
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