WASHINGTON (dpa-AFX) - Gold prices advanced on Wednesday, rebounding from yesterday's steep decline due to a fall in stock markets triggered by concerns of overvaluation in equities, which moved investors away from riskier assets to precious metals.
Front Month Comex Gold for November delivery rose by $32.60 (or 0.83%) to $3,980.30 per troy ounce.
Front Month Comex Silver for November delivery surged by 73.30 cents (or 1.56%) to $47.863 per troy ounce.
Concerns of overvaluation and doubts about the sustainability of the sky-high prices of technology stocks raised by the CEOs of Morgan Stanley and Goldman Sachs weighed down on U.S. equities yesterday. Last month, JPMorgan Chase CEO Jamie Dimon warned of an increased risk of a significant correction in the short-term.
The surge in enthusiasm for generative AI is now being equated to the dotcom bubble.
As markets detached from riskier assets, the yellow metal rebounded from yesterday's slump.
The U.S. government shutdown entered day number 36 today to become the longest shutdown in U.S. history.
On Tuesday, the Senate failed for the 14th time to vote to pass a temporary budget bill.
As the stalemate between Republicans and Democrats over short-term funding persists, there seems to be no end in sight.
According to Congressional Budget Office estimates, the shutdown has so far reduced GDP by around $11 billion and is expected to cost the U.S. economy more than $14 billion if it continues.
With no official data on inflation and jobs available, markets and the U.S. Federal Reserve are left to rely on private economic reports.
According to CME Group's FedWatch Tool, investors are betting on a 68.1% chance of a 25-basis-point interest rate cut at the upcoming December 9-10 Federal Reserve's meeting.
Data released today by Mortgage Bankers Association of America revealed that the purchase index in the U.S. decreased to 163.30 for the week ending October 31 from 164.30 in the previous week.
Today, a Institute for Supply Management report showed the U.S. services PMI rose to 52.4 in October from 50 in September, beating forecasts of 50.8.
While the business activity index increased to 54.3 points in October from 49.9 points in September, the employment rose to 48.2 points in October from 47.2 points in September.
The ADP employment report released today revealed that private businesses in the U.S. added 42,000 jobs in October, rebounding after an upwardly revised 29,000 jobs cut in September. While the services sector added 33,000 jobs, the goods producing sector added 9,000 jobs. A strong job market most likely lowers the chances of rate cuts.
Last week, U.S. Fed Chair Jerome Powell warned investors not to assume another rate cut in December as a foregone conclusion.
In the ongoing Russia-Ukraine war, today Russia has encircled the Ukrainian troops in Pokrovsk and Kupiansk. Ukrainian long-range drones attacked an industrial facility around 1,300 kilometers in Sterlitamak inside Russia's Bashkortostan.
A hearing in the case pertaining to the legality of U.S. President Donald Trump's tariff imposition is beginning in the U.S. Supreme Court today. The fate of several economies in many countries depends on the outcome.
A verdict could come only after a few months. Still, analysts are focused on the arguments to judge the direction of the legal process.
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