Gold recovers some of its losses as the US government shutdown becomes the longest in history

After falling by more than 1.30% on Tuesday, gold rebounded, recovering a significant portion of its losses in midday trading on Wednesday, November 5th, despite a stronger US dollar. This recovery was supported by increased demand for safe-haven assets and the ongoing US government shutdown, now the longest in history. Prices are also awaiting the release of private sector employment figures today. Gold is trading up approximately 0.85% at $3,965 per ounce, while silver is trading at $47.64 per ounce, up 1.13%.

The government shutdown entered its 36th day on Tuesday, marking the longest in history. It continues to negatively impact Americans, with federal program cuts, the suspension of paychecks for many employees, and flight delays. President Trump’s continued refusal to negotiate with Democrats is further fueling demand for safe-haven assets.

Meanwhile, markets are awaiting today’s US private sector employment figures, with expectations of around 32,000 new jobs added in October. This comes as expectations for a Federal Reserve interest rate cut in December have diminished. According to the CME FedWatch tool, markets are pricing in a 70% probability of a 25-basis-point rate cut in December. Therefore, today’s figures, and the employment figures if released on Friday, are crucial for influencing interest rate expectations in December.

The US Dollar Index is trading at its highest level in four months, rising for the sixth consecutive session and trading above 100. This is supported by reduced expectations of an interest rate cut following comments by Jerome Powell last week, as well as statements from three other Federal Reserve members since the beginning of the week who refrained from supporting a further rate cut.

Platinum is trading at $1,533, down 0.12%, while palladium is down about 0.10%, trading at $1,390.