Gold reached a fresh record, rallying as much as 2.2% to top $3,970 an ounce.
The upswing, which follows a run of seven weekly gains, comes as the US government shutdown has delayed key data, further obscuring a murky economic outlook. With a lack of official figures, traders are depending on private reports for signals, while the US central bank is struggling to assess changing conditions. Traders are still pricing in a quarter-point rate cut this month, which would benefit gold further as it doesn’t pay interest.
Prices have risen more than 50% this year, with gold-backed exchange-traded funds swelling again last week.
Options traders continued to chase a further rally, adding even more bullish positions in SPDR Gold Shares ETF. A trader sold $355 calls that were bought in late September when gold was more than 5% lower, and bought $370 calls equivalent to more than 26 million shares, betting on another 1.8% gain by the end of next week.
Bullion has pushed higher this year, spurred by central-bank purchases as they diversify away from the US dollar. Investors have flocked to assets like gold, silver and Bitcoin, in what’s been dubbed the “debasement trade,” fueled by concerns about fiat currencies.
The “backdrop is intact with the Fed on path to cut rates further, alongside the weakening labor market,” said Ahmad Assiri, an analyst at Pepperstone Group Ltd. However, “it feels like the risk-reward dynamics are shifting and a tactical pullback would be viewed as a healthy phase within an extended rally.”
Gold rose 1.9% to $3,961.19 as of 4:55 p.m. in New York. The Bloomberg Dollar Spot Index advanced 0.3%. Silver, platinum and palladium all climbed.
