Gold surged higher on Wednesday to hit a record high of $3,895 and retreated as news of the US government shutdown and softer-than-expected jobs data confirmed investors’ belief that the Fed will cut interest rates at its next meeting.
At 9.20am, gold was at $3,861, down 0.12% since it opened in early trading on Thursday in the Asian session.
Financial markets remained calm despite the ongoing US government shutdown, which could also delay the release of the Non-Farm Payrolls (NFP) report on Friday.
The latest ADP employment data showed that private hiring plunged in September.
Other data showed that manufacturing activity recovered in September, but remained in contractionary territory, as revealed by the Institute for Supply Management (ISM).
Expectations that the Fed will cut rates at the October 29 meeting remain high, standing at 98% for a 25 basis point rate cut and a 4% chance of keeping rates unchanged.
