Gold prices jump to near 3-week high amid US shutdown progress

Investing.com-- Gold prices rose in Asian trade on Tuesday, seeing some demand amid growing uncertainty over U.S. trade policy and interest rates, with recent strength in the dollar doing little to deter bullion. 

Increased risk appetite, as U.S. lawmakers moved closer to ending the country’s longest ever government shutdown, also did little to deter gold, as markets also fretted over the shutdown’s economic impact. 

Spot gold rose 0.6% to $4,142.14 an ounce, while gold futures for December rose 0.7% to $4,148.92/oz by 23:57 ET (04:57 GMT). 

Gold demand persists even as shutdown progress supports risk 

Investors remained largely pinned to gold even as progress towards ending a long-running U.S. shutdown helped improve risk appetite, albeit marginally. 

The yellow metal rebounded sharply to back above the coveted $4,000/oz level this week, largely shrugging off pressure from a stronger dollar. 

The U.S. Senate on Monday night approved a bill to unlock more funding and end the longest ever government shutdown in history, at 41 days so far. 

The bill will now be considered in the House of Representatives on Wednesday, with the Republican majority in the House signaling it will approve the measure. 

Other precious metals also advanced tracking gold. Spot platinum rose 0.7% to $1,587.48/oz, while spot silver rose 0.9% to $50.9685/oz. 

Gold rebound fueled by economic, trade uncertainty 

ANZ analysts said gold’s recent rebound was fueled by safe haven demand, amid heightened uncertainty over U.S. trade tariffs and the broader economy. 

They noted that the Supreme Court had recently grilled the Trump administration over its use of an emergency act to pass its tariff agenda, which could be deemed unconstitutional. 

Trump warned on Monday evening that overturning his tariffs could cost the government more than $2 trillion in paying back the duties. 

“Whether or not the court rules Trump wrongly imposed tariffs by invoking the 1977 International Emergency Economic Powers Act, it is likely that there are other laws he can draw on if needed. In the meantime, the market is likely to face months of uncertainty with a ruling not expected before the end of the year,” ANZ analysts wrote in a note. 

On the economic front, markets remained uncertain over the U.S. economy, especially as the shutdown delayed the release of several key official readings.

Traders were also seen scaling back bets that the Federal Reserve will cut interest rates further in December.