Gold notches fresh high on safe-haven demand, Fed rate-cut bets
FUNDAMENTALS
* Spot gold held its ground at $3,961.64 per ounce, as of 0055 GMT, after hitting a fresh high of $3,977.19 earlier in the session.
* U.S. gold futures for December delivery gained 0.2% to $3,985.50.
* The White House on Monday backed off President Donald Trump’s assertion that government employees were already being laid off due to the shutdown, but warned job losses could result as the standoff looked set to stretch into a seventh day.
* Kansas City Fed Bank President Jeff Schmid signaled he is disinclined to cut interest rates further, arguing that as the Fed navigates between the twin risks of overly tight and overly easy policy, it should stay focused on the danger of too-high inflation.* However, markets are pricing in additional 25-basis-point rate cuts in both October and December, with probabilities of 95% and 83%, respectively, according to the CME FedWatch tool * Non-yielding gold thrives in a low-interest-rate environment and during economic uncertainties.
* Gold has climbed 51% so far this year on strong central bank buying, increased demand for gold-backed Exchange-Traded Fund (ETFs), a weaker dollar and growing interest from retail investors seeking a hedge amid rising trade and geopolitical tensions.
* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.17% to 1,013.16 metric tons on Monday from 1,014.88 tons on Friday.
* Elsewhere, spot silver eased 0.4% to $48.32 per ounce, platinum fell 0.8% to $1,612.85 and palladium lost 0.3% to $1,315.86.
DATA/EVENTS (GMT)
0600 Germany Industrial Orders MM, Consumer Goods SA Aug
0600 Germany Manufacturing O/P Cur Price SA Aug
0600 UK Halifax House Prices MM,YY Sep
0645 France Reserve Assets Total Sep
1230 US International Trade $ Aug.