Gold price set for seventh weekly gain as US shutdown clouds rate path

Gold rose on Friday and headed for a seventh weekly advance as the US government shutdown added another layer of uncertainty for investors seeking signals on the Federal Reserve’s monetary-easing path.

Bullion held above $3,885 an ounce, less than $12 from the record reached on Thursday. The torrid pace of the advance has left gold vulnerable to pullbacks, with technical indicators showing it’s been trading in overbought territory for the past month.

With the US shutdown delaying Friday’s government payrolls report, investors are relying on private data for crucial clues about an already murky economic outlook. The blackout will also make it harder for central bankers to interpret the economy’s direction, Fed Bank of Chicago President Austan Goolsbee said this week. Money markets are still almost fully pricing in a quarter-point cut at the end of the month, and are widely expecting another in December. Lower borrowing costs tend to benefit non-yielding precious metals.

Gold has soared about 48% this year in a rally that’s seen successive all-time highs, with prices now on track for the biggest annual gain since 1979. The precious metal has been supported by central-bank buying and increasing holdings in gold-backed exchange-traded funds, as the Fed resumed interest-rate cuts.

Spot gold traded up 0.8% to $3,886.20 an ounce as of 4:09 p.m. in New York. The Bloomberg Dollar Spot Index fell 0.1%. Silver rose 2.1% to $47.9655 an ounce, while platinum and palladium also advanced.

(By Sybilla Gross and Yvonne Yue Li)