By Brijesh Patel
(Reuters) -Gold edged higher on Friday and was set for a seventh straight weekly gain, buoyed by expectations of further U.S. interest rate cuts this year and worries over the impact of a U.S. government shutdown.
Spot gold was up 0.1% at $3,859.09 per ounce, as of 0623 GMT, after hitting an all-time high of $3,896.49 on Thursday. Bullion has risen 2.5% so far this week.
U.S. gold futures for December delivery gained 0.4% to $3,882.40.
“Climb in the dollar caused a minor speed bump for the gold price, but the precious metal is still well within shouting distance of the $3,900 level,” said KCM Trade Chief Market Analyst Tim Waterer.
“Overall, with a U.S. government shutdown creating uncertainty over the GDP impact, and with lower U.S. interest rates likely arriving again this month, conditions remain ripe for gold to continue marching forward.”
The U.S. government shutdown extended to a second day on Thursday, potentially delaying key economic data releases, including the closely watched non-farm payrolls report due on Friday.
Federal Reserve Bank of Dallas President Lorie Logan said the U.S. central bank appropriately took out some insurance against any sharp deterioration in the labour market with its rate cut last month, but needed to be “cautious” with any further easing.
However, recent U.S. economic data has lifted expectations for further rate cuts this year, with traders pricing in a near-certain 25 basis-point reduction this month, according to CME Group’s FedWatch tool.
Gold, often used as a safe store of value during times of political and financial uncertainty, thrives in a low interest rate environment. Bullion has risen 47% so far this year.
Meanwhile, the Perth Mint’s gold product sales in September jumped 21% from the previous month, while silver sales rose to a five-month high.
Elsewhere, spot silver gained 0.6% to $47.24 per ounce, platinum eased 0.1% to $1,566.90 and palladium gained 0.6% to $1,248.40.
(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu)
