By Daniel Takieddine, Co-founder and CEO of Sky Links Capital Group
Gold Steady Near Records as Shutdown and Dovish Fed Bets Sustain Safe-haven Flows
Gold held close to all-time highs on Friday, positioning the metal for a seventh straight weekly gain after setting a fresh peak earlier this week. The rally has been fuelled by safe-haven demand and firm expectations of further Federal Reserve easing, even as some policymakers urged caution.
The partial US government shutdown entered its third day, disrupting the release of key economic data. With official statistics suspended, investors leaned on other indicators. ADP payrolls contracted for a second consecutive month, reinforcing the narrative of a weaker labour market and strengthening the case for two more rate cuts this year. Markets price a 25-basis-point reduction in October and another in December. Still, Dallas Fed President Lorie Logan cautioned against moving too aggressively.
Physical demand trends added further support. Buying in India increased this week despite elevated prices, while central banks collectively added 15 tonnes to reserves in August, signalling steady accumulation. Notably, Poland’s central bank confirmed plans to raise the gold share of its reserves from 20% to 30%, underscoring continued strategic interest in bullion.
Geopolitical tensions in the Middle East and Eastern Europe also reinforced safe-haven positioning, keeping bullion well supported.