WASHINGTON (dpa-AFX) - Gold prices fell on Thursday, giving up early advances and moving lower as investors resorted to profit taking from recent record highs and with the U.S. dollar gaining ground from earlier losses while markets assessed the implications of ongoing U.S. government shutdown.
Front Month Comex Gold for October delivery fell by $27.80 (or 0.72%) to $3,839.70 per troy ounce.
Front Month Comex Silver for October delivery declined steeply by $1.2900 (or 2.73%) to $46.000 per troy ounce.
Yesterday, gold prices climbed by 0.70% to $3,867.50 per troy ounce, a new record closing high for the yellow metal which traded up for five consecutive sessions. Today, many investors resorted to profit taking from the recent gains.
The yield on U.S. 4-week bill rose to 4.11%, marking a 0.03% increase from the previous session, the yield on 8-week bill rose to 4.04%, marking a 0.03% increase from the previous session. Yields in T-bills helped the dollar reverse earlier losses. The U.S. dollar index was last seen trading at 97.88 (gaining 0.16%).
The U.S. government shutdown enters the second day today. With the ceasing of all non-essential services across the U.S., the Trump administration has halted $18 billion in infrastructure funding.
U.S. President Donald Trump has called on Republican allies to utilize the shutdown as an opportunity to make lasting cuts and indicated a willingness to fire thousands of federal workers, raising concerns of huge unemployment in an already turbulent economic scenario.
Roughly 750,000 workers are likely to be furloughed.
The next vote to try to end this impasse is not likely to happen before Friday. As the Senate is adjourned, fears that the crisis could drag on are growing.
Due to the shutdown, key data from the government may not be released, including the nonfarm payrolls report this Friday, which are essential in the U.S. Federal Reserve's monetary policy decision making. As a result, the Fed's interest rate decisions could be impacted.
Yesterday, data revealed that the U.S. private payrolls fell by 32,000 jobs in September after a downwardly revised 3,000 decline in August.
Today, a Challenger job-cut report that provides information on the number of announced corporate layoffs by industry and region revealed that U.S.-based employers announced 54,064 job cuts in September (the least in three months) compared to 85,979 in August, and down 25.8% year-on-year. Services cut the most jobs (6,290) followed by the energy sector (5,807) and technology (5,639).
The report further states that if rate cuts are instituted, it could lead to some stability in the job market in the fourth quarter of 2025.
Before the shutdown began, traders were betting on two rate cuts this year and another next year. Now, with weak jobs data and the impending federal job cuts, rate cut expectations have heightened.
According to CME Group's FedWatch Tool, investors are betting on a 98.9% chance of a 25-basis-point interest rate cut at the Fed's October 28-29 meeting.
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