Gold prices remained largely stable in Asian trading on Thursday after jumping more than 1% in the previous session, as a slight decline in the US dollar and uncertainty surrounding the prolonged US government shutdown helped support sentiment.
Spot gold rose 0.2% to $3,988.79 an ounce by 8:37 a.m. Saudi time, while U.S. gold futures rose 0.1% to $3,995.70.
The yellow metal jumped 1.3% in the previous session as a global risk-averse mood gripped markets amid growing fears of a stock market bubble.
Gold stabilizes as the dollar weakens; government shutdown fears take center stage.
The US dollar index fell 0.2% in Asian trading on Thursday as investors returned to riskier assets after a brief sell-off in technology stocks earlier in the week. A rebound on Wall Street on Wednesday helped ease concerns about high valuations.
However, the prolonged US government shutdown, the longest in history, has added to the uncertainty in financial markets.
The suspension of many official economic data releases has led investors to rely more heavily on private-sector indicators, making it difficult to assess the health of the world's largest economy.
Meanwhile, new data pointed to a still-resilient US labor market. ADP employment data showed that private-sector payrolls rose by 42,000 in October, nearly double market expectations.
The strong reading reduced bets that the Federal Reserve will cut interest rates in December. Expectations of higher interest rates for an extended period typically weigh on gold, which does not offer a yield.
Adding to investor caution, the US Supreme Court began hearings this week on the legality of tariffs imposed under President Donald Trump. The case could have far-reaching implications for trade policy, and markets are watching for the potential long-term effects on inflation and supply chains.
We remain positive on our outlook for gold, despite the recent pullback in prices, with key support still in place, including central bank demand and safe-haven assets, ING analysts said in a note.
Despite recent easing of trade tensions, significant geopolitical uncertainty remains, driving demand for safe-haven assets, they added.
Metal markets are quiet
Other precious and industrial metals also traded in narrow ranges on Thursday.
Silver futures rose 0.2% to $48.12 an ounce, while platinum futures remained virtually unchanged at $1,564.60 an ounce.
Benchmark copper futures on the London Metal Exchange rose 0.4% to $10,771.20 a ton, while U.S. copper futures rose 0.6% to $5.02 a pound.
