Gold prices rose for the fifth consecutive session on Thursday and hit a more than three-week high, supported by expectations that the US government's reopening will resume economic data flows and strengthen betting on further interest rate cuts.
Spot gold prices rose 0.2%, to $4,207.24 an ounce at 06:37 GMT, the highest level since October 21. The US December gold contract remained stable at 4,211 USD/ounce.
Gold is extending its upward trend thanks to a weaker US dollar, expectations of a rate cut by the Federal Reserve and persistent buying by central banks, said Jigar Trivedi, senior analyst at Reliance Securities.
Although prices may move sideways in the short term after a rapid increase, the general outlook is still positive. Gold prices could surpass $4,300 an ounce by the end of the year, as long as real yields remain low and monetary policy continues to ease."
US President Donald Trump signed a law on Wednesday to end the longest government shutdown in US history. The closure that began on October 1st has delayed the release of a series of important economic data, including reports on salary tables and inflation.
Economists say the US Department of Labor's Statistics Office should prioritize completing the November jobs and inflation report to ensure Fed officials have updated information for the December policy meeting.
According to a Reuters survey, 80% of economists predict the Fed will continue to cut interest rates by another 25 basis points next month to support the weakening labor market, up slightly compared to the survey results last month.
Gold - an asset that does not yield - often moves positively in a low interest rate environment and period of economic instability.
Gold prices have risen 60% since the beginning of the year, hitting a record high of $4,381.21/ounce on October 20, fueled by geopolitical tensions, trade risks and expectations of a further Fed rate cut.
Meanwhile, the Yen fell to a record low against the euro and fluctuated near a nine-month low against the USD after the new Japanese Prime Minister said she wanted the Bank of Japan (BOJ) to raise interest rates cautiously and slowly.
In other precious metals, spot silver prices rose 1.1% to $54.02/ounce, heading towards a record high on October 17. platinum fell 0.1% to $1,612.80 an ounce, while palladium rose 0.5% to $1,480.59/ounce.
