Quick overview

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XAU/USD was up 0.64% at the last trading session of the week as the US government shutdown continues to influence markets, while risk aversion keeps US equity markets on track for weekly losses. Bullion closed at $4,002 after climbing from the daily low of $3,974.

According to the University of Michigan’s preliminary Consumer Sentiment survey for November, uncertainty remains prevalent in the US economy. Bullion gains 0.64 percent amid risk aversion and increased expectations of a December Fed rate cut.

The COVID emergency caused the index to drop to its lowest level since June 2022, indicating that households are worried “about potential negative consequences for the economy” of the US government shutdown. Gold, traditionally seen as a hedge against uncertainty and lower interest rates, maintained its gains, rising 0.13 percent so far this week.

In October, employers laid off more than 150,000 workers, marking the largest monthly reduction in over 20 years. This information comes from the Challenger report by Gray and Christmas, which indicates that the U.S. job market may be contracting more quickly than anticipated.

According to data from the Prime Market Terminal’s interest rate probability tool, market participants are estimating a 68 percent chance of a rate cut by the Federal Reserve (Fed) during its December meeting.

The US Dollar Index (DXY), which compares the US dollar against six other currencies, falls 0.15 percent to 99.55. After a decline of seven-and-a-half basis points on Thursday, US Treasury yields stabilized, with the 10-year Treasury note yield remaining steady at approximately 4.085 percent. US real yields, which tend to move inversely to gold prices, increase nearly two basis points to 1.805 percent.