Gold prices climb above $4,000 as US dollar weakens and economic concerns mount
Gold prices rise to $4,005 per ounce as the US dollar weakens and concerns over a US government shutdown increase demand for safe-haven assets.
Reuters reported on Friday that gold prices rose sharply, surpassing $4,000 per ounce, as the US dollar weakened and concerns over the ongoing US government shutdown led to increased demand for safe-haven assets. At the same time, the US stock market saw significant declines, especially in the technology sector, marking its worst weekly drop in 7 months amid worries over the sustainability of the artificial intelligence (AI) stock rally.
By 3:15 p.m. (Eastern Time), Spot Gold had increased by 0.7%, trading at $4,005.21 per ounce, while US Gold Futures for December delivery rose by 0.5%, closing at $4,009.80 per ounce.
The weakening US dollar (DXY) made gold, priced in US dollars, cheaper for holders of other currencies, further driving demand. According to Jim Wyckoff, Senior Analyst at Kitco Metals, the recent price movements suggest that gold and silver may be forming a solid base for future growth.
Gold is traditionally viewed as a hedge against uncertainty, especially in times of low interest rates, as it does not generate yield. With the US government shutdown delaying the release of important labour market data, investors have turned to private sector information to gauge the likelihood of a Federal Reserve interest rate cut. Recent reports indicate job losses in October, leading to growing speculation that the Fed might cut rates again in December 2025, with a 66% chance of a 0.25% rate cut, according to CME Group’s FedWatch Tool.
Meanwhile, China has begun designing a new rare earth mineral export licensing system, which could expedite exports, though experts say it is unlikely to lift all restrictions as Washington had hoped.
Despite easing trade tensions, the trade conflict remains unresolved, and gold is likely to continue in demand as a safe-haven asset, as stated by Commerzbank in their latest report.
On the physical gold market, demand from India has remained subdued due to price volatility, which has caused hesitation among buyers and led to higher discounts offered by sellers.
In other metals, Spot Silver increased by 0.9%, reaching $48.41 per ounce, Platinum rose 0.1% to $1,543.00, and Palladium gained 1.5%, trading at $1,395.49. However, all three metals saw declines over the course of the week.
