(Bloomberg) — Gold declined as traders weighed the chances of another Federal Reserve interest-rate cut before the end of the year.
Bullion traded near $4,040 an ounce after a modest weekly loss. Several US central bank officials sounded a cautious note on monetary policy, though New York Fed President John Williams said he sees room for a reduction in borrowing costs in the near term. Gold pared losses on Friday after Williams’ comments but still ended the session lower.
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The US shutdown delayed the release of data that the market would normally use to gauge the chances of a cut. September retail sales and producer-price data due Tuesday, as well as jobless claims on Wednesday, should provide a much-needed temperature check. Futures traders are pricing in a slightly more than 60% chance of a quarter-point cut next month. Lower rates benefit bullion as it doesn’t pay interest.
“Looks like the market badly needs a rate cut,” said Charu Chanana, chief investment strategist at Saxo Markets in Singapore.
Gold has been in a consolidation phase since surging to a record high above $4,380 an ounce on Oct. 20. It’s still up around 55% this year, supported by heightened trade and geopolitical uncertainty, as well as concerns over deteriorating fiscal outlooks for many governments.
Spot gold was 0.5% lower at $4,046 an ounce as of 11:26 a.m. in Singapore after dropping 0.3% on Friday. The Bloomberg Dollar Spot Index was flat. Silver edged lower, while platinum and palladium gained.
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