WASHINGTON (dpa-AFX) - Gold prices soared on Wednesday amid rising expectations that the reopening of the U.S. government would pave the way for volumes of economic releases that would pressure the U.S. Federal Reserve to implement interest rate cuts.
Front Month Comex Gold for November delivery gained by $97.60 (or 2.38%) to $4,204.40 per troy ounce.
Front Month Comex Silver for November delivery skyrocketed by $2.7140 (or 5.36%) to $53.332 per troy ounce.
In the U.S., the government shutdown entered day number 43.
A short-term funding bill to run the government until January 30, formulated after an agreement between Republicans and Democrats, was advanced by the Senate on Monday and awaits a vote in the House of Representatives.
If passed, it will be sent for U.S. President Donald Trump's signature and thereby end the longest shutdown in U.S. history.
Around 750,000 federal employees were furloughed and key official economic data releases have been delayed due to the shutdown. More than 1,200 flights stand canceled and food benefit distribution to millions was interrupted.
Even as the end of shutdown approaches, traders moved with cautious optimism.
Markets are pricing in that the barrage of economic data to be released after the reopening will heighten the chances of a Fed rate cut next month.
CME Group's FedWatch Tool is currently indicating that investors are betting on a 65.4% chance of a 25-basis-point interest rate cut at the Fed's upcoming December 9-10 meeting.
As lower rates push gold price on the upside, expectations of a rate cut jacked up the yellow metal today.
Today, the Mortgage Bankers Association of America's Purchase Index in the U.S. showed an increase up to 172.70 points for the week ending November 7 from 163.30 points in the previous week.
Yesterday's preliminary estimate of the ADP numbers revealed that U.S. private employers shed an average of 11,250 jobs per week during the four weeks ending October 25 reflecting a deterioration in the labor market.
Further, the National Federation of Independent Business Optimism index also fell to 98.2 in October, the lowest in six months.
Trump imposed tariffs on the trading partners of the U.S. and caused uncertainty in the economy. More pressure was added when the shutdown began on October 1.
Last week, when the U.S. Supreme Court cast doubt on the legality of the president's authority to impose tariffs under IEEPA, it compounded the confusion further. Trump stated that if tariffs were revoked, it would be devastating for the economy.
Despite several headwinds, the quick development which began on Sunday in ending the shutdown has come as a breather to markets.
Analysts feel that despite the potential end to the shutdown and the improvement in risk-appetite, ongoing accumulation of the precious metal by the world's central banks (indicated by recent World Gold Council's data) and the prevailing weakness in the U.S. dollar would help gold remain bullish in the short term.
Copyright(c) 2025 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2025 AFX News