Gold Edges Higher Amid U.S. Weakness, Haven Demand Rises

Gold Edges Higher Amid U.S. Weakness, Haven Demand Rises

Global gold prices climbed on Friday, underpinned by signs of a weakening U.S. economy and the resurgence of safe-haven demand.

Bullion traded around US$ 4,017 per ounce, after finishing the previous week little changed. 
The move comes as the U.S. consumer sentiment index plunged towards record lows, driven by a prolonged government shutdown and rising inflation. 

Though a deal to reopen the U.S. government appears to be nearing completion — moderate Senate Democrats were reported to support an agreement — market concerns over the economic outlook have remained elevated. 

Gold’s rally earlier this year has been remarkable: from mid-October it has retreated about 8 % from its all-time high above US$ 4,380/oz, but remains up by more than 50 % for the year. 
Key drivers behind the strength include heightened economic and geopolitical uncertainty, strong central-bank buying and elevated retail demand. 

As of 8:30 a.m. Singapore time on Friday, spot gold rose 0.4 % to US$ 4,016.92/oz. The Bloomberg Dollar Spot Index added 0.1 %, while silver, platinum and palladium also advanced. 

Why It Matters

• Safe-haven appeal: With economic growth in the U.S. showing signs of stress and the government shutdown dragging on, investors are gravitating toward gold as a hedge.

• Currency and inflation interplay: A modest rise in the U.S. dollar dampens some of gold’s upside, but inflation and uncertainty still boost demand.

• Year-to-date context: Even after the pullback from record highs, gold remains significantly higher this year, suggesting persistent bullish undercurrents.

What to Watch

• The outcome of the U.S. government shutdown and any further indicators of consumer or business sentiment in the U.S.—these will influence gold’s near-term trajectory.

• Moves in the U.S. dollar and real interest rates. A stronger dollar or higher yields could dampen gold demand, while the reverse may amplify it.

• Central-bank buying trends and retail demand patterns, which have been major supports for gold’s rally.

The Bottom Line

Gold’s upward creep reflects broader unease in global financial markets: with the U.S. economy showing signs of stress, investors are re-embracing gold’s role as a haven asset. While the metal has pulled back from record highs, the prevailing uncertainty suggests it may still have room to manoeuvre.