WASHINGTON (dpa-AFX) - Gold prices edged lower on Thursday as the reopening of U.S. government boosted investors' confidence in riskier assets even as the new funding bill has raised concerns about national debt piling up further.
Front Month Comex Gold for November delivery declined by $17.50 (or 0.42%) to $4,186.90 per troy ounce.
Front Month Comex Silver for November delivery dipped by $25.80 cents (or 0.48%) to $53.074 per troy ounce.
The U.S. government shutdown, which began on October 1, has ended after recent swift political developments that started on Sunday night.
On Monday, the Senate advanced a short-term funding bill to finance the government through January 30, formulated by the Republicans with the consent of several Democrats.
Yesterday, the bill moved to the House of Representatives and was passed in a 222 to 209 vote and was sent for the president's signature. Notably, six Democrats joined Republicans to vote for the bill.
U.S. President Donald Trump gave the final approval and signed the bill in the Oval office.
The smooth passage of this bill facilitates reopening of the government and allows millions of furloughed workers to return to work, restart multiple programs now frozen, and restart several closed federal agencies; however, all until January 30 when the next deadline comes up.
The Congressional Budget Office has estimated that the GDP for current-quarter has been hit by about 1.5 percentage points due to the shutdown.
The reopening permits upcoming and pending economic releases from Bureau of Labor Statistics and other agencies to be published without any further delay, which is a good news for the markets as well as the U.S. Federal Reserve.
However, with October nonfarm payrolls report and CPI unlikely to be released, the Fed is still likely to lean on private data.
Significantly, this temporary arrangement has added around $1.8 trillion to the already-existing U.S. national debt of $38 trillion and has turned investors cautious before making big bets.
The most recent private labor data indicated a deterioration in the jobs market, bolstering rate cut expectations.
Notably, with the difficulty of analyzing the economic scenario prevailing, Susan Collins, president of the Federal Reserve Bank of Boston and Raphael Bostic, president of the Atlanta Fed, have expressed several reasons for keeping rates unchanged.
On the geopolitical front, despite sanctions on Russian oil by the U.S. and the west, and a Russian envoy's statement that Russia is ready to resume ceasefire negotiations in Istanbul, Russia has not halted its aerial launches and land aggression.
Russia struck the Zaporizhia region of Ukraine with 645 aerial launches while Russian drone attacks targeted the Dnipropetrovsk region.
CME Group's FedWatch Tool is currently indicating that investors are betting on a 49.4% chance of a 25-basis-point interest rate cut in the upcoming December 9-10 meeting of the Federal Reserve.
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