By: Economy Middle east

Gold prices rose marginally on Friday and were headed for a seventh consecutive weekly gain, supported by expectations of additional U.S. interest rate cuts this year and uncertainty surrounding the impact of the U.S. government shutdown.

In Dubai, gold rates largely held steady, with 24-carat gold remaining at AED463.25 and 22-carat gold holding at AED429. Additionally, 21-carat gold remained at AED411.5 and 18-carat gold declined a marginal AED0.25 to AED352.5.

Globally, spot gold gained 0.04 percent to $3,846.3 as of 4:29 GMT, after hitting a new all-time high of $3,896.49 on Thursday. Bullion has risen 2.4 percent so far this week. Meanwhile, U.S. gold futures for December delivery dipped 0.02 percent to $3,867.30.

U.S. dollar’s rise limits gold’s gains

The U.S. dollar’s rise this week acted as a headwind for gold prices despite their record run. However, the precious metal is still expected to surpass the record $3,900 level. The U.S. dollar index rose 0.04 percent to 97.88, making greenback-priced bullion more expensive for overseas buyers.

Uncertainty over the economic impact of a U.S. government shutdown and expectations of another interest rate cut this month are seen as supportive factors for the surge in gold prices. The shutdown, now in its third day, risks delaying key economic indicators, including the closely watched non-farm payrolls report scheduled for later in the day.

“Gold closed lower overnight at $3856, after hitting a fresh record high of $3897 earlier in the session. The reversal followed hawkish comments from Dallas Fed President Lorie Logan, which boosted the U.S. dollar, and the Supreme Court’s decision to block President Trump from removing Federal Reserve Governor Lisa Cook. This ruling eases for now, concerns about the Fed’s ipendence and the prospect of another dovish FOMC appointment,” said Tony Sycamore, an analyst at IG.nde

Strong U.S. economic data boosts October rate cut bets

Gold prices declined from their record high after Dallas Federal Reserve President Lorie Logan said the central bank’s rate cut last month served as insurance against a sharp downturn in the labor market, but emphasized the need for caution with any additional policy easing. Meanwhile, Chicago Fed President Austan Goolsbee said he is becoming increasingly concerned about inflation, cautioning against moving too quickly on rate cuts.

Stronger U.S. economic data has reinforced market expectations for further monetary easing, with traders now almost fully pricing in a 25 basis-point rate cut this month, according to CME Group’s FedWatch tool. Earlier this week, data showed that private payrolls fell by 32,000 in September, following a downwardly revised 3,000 drop in August.

Gold, traditionally viewed as a safe-haven asset in times of political and financial uncertainty, benefits from lower interest rates.

“While other supportive tailwinds remain for gold, including rising geopolitical tensions in Europe, increasing fiscal debt, and robust buying from central banks and private investors, we suspect a pullback toward $3,780 is looming for gold, which will assist in working off overbought readings,” added Sycamore.

Other precious metals

As gold prices extended their gains, the precious metals market saw mixed movement on Friday. Spot silver dipped 0.18 percent to $46.88, while platinum fell 0.58 percent to $1,559.97. However, palladium gained 0.27 percent to $1,244.41.