As of 11:06 a.m. ET (1506 GMT), spot gold was up 0.3% to $3,845.33 an ounce, recovering from previous losses during U.S. hours. During Asian trade, prices reached a record high of $3,871.45.
Tuesday saw gold prices rise to almost all-time highs, supported by predictions of rate reduction from the Federal Reserve and worries over an impending government shutdown in the United States.
As of 11:06 a.m. ET (1506 GMT), spot gold was up 0.3% to $3,845.33 an ounce, recovering from previous losses during U.S. hours. During Asian trade, prices reached a record high of $3,871.45.
December delivery U.S. gold futures increased 0.5% to $3,873.20.
“After unimpressive U.S. JOLTs data, gold is shown surprising resilience once again, easily recovering early losses that will not stand in the way of another rate decrease in a month,” said independent metals trader Tai Wong.
“The impending partial closure of the US government increases uncertainty and contributes to the drumbeat of ‘buy gold.'”
August saw a slight rise in U.S. job postings despite a fall in hiring, which is consistent with improving labor market conditions that may enable the Fed to lower interest rates once more next month.
According to CME Group’s FedWatch tool, traders are presently pricing in a 97% likelihood of an interest rate drop at the Federal Reserve’s October meeting. In times of uncertainty and low interest rates, non-yielding gold often prospers.
September has seen an 11.6% increase in the price of bullion, putting it on pace for its largest monthly percentage gain since August 2011. For the quarter, it has increased by 16.5%.
With Republicans and Democrats still at a standstill and unable to reach an agreement by the midnight funding deadline, Washington prepared for an impending government shutdown on Tuesday.
“Any shutdown that lasts for a long time is going to have a negative impact on the U.S. economy and that would push the Federal Reserve to ease, which would probably be good for gold,” Melek said.
The U.S. Labor Department said on Monday that in the event of a partial government shutdown, its statistics office will stop releasing data, including Friday’s highly anticipated monthly employment report.
In other news, spot silver has increased 17.3% this month but fell 0.7% to $46.62 an ounce. Palladium dropped 1.1% to $1,252.39, while platinum dropped 1.5% to $1,576.75.