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Gold prices rise as the dollar weakens and US shutdown fears persist

Gold prices rose Friday, as the dollar weakened and the uncertainty surrounding the U.S. shutdown contributed to the demand for safe-haven assets. Wall Street indexes are set for a sharp weekly drop.

As of 11:12 am, spot gold rose 0.5% to $3,997.47 an ounce. ET (1612 GMT). The contract has dropped 0.1% in the last week.

U.S. Gold Futures for December Delivery gained 0.1%, to $3.993.60 an ounce.

Investors worried about the sustainability of an artificial intelligence rally on Friday, which is a concern for tech-heavy markets.

Other currency holders can now buy greenback bullion at a lower price.

Jim Wyckoff is a senior analyst with Kitco Metals. He said, "The recent price movement suggests that we are putting a floor under the gold and silver prices."

As a non-yielding investment, gold tends to do well in environments with low interest rates.

The U.S. shutdown delayed the release of the non-farm payroll report for October. Traders turned to the private sector data which showed that there were job losses in the month of October to gauge the probability of another Federal Reserve rate cut this year.

According to CME Group’s FedWatch tool, the markets now expect a rate cut of 25 basis points in December.

Industry insiders say that China has begun designing a new licensing regime for rare earths, which could accelerate shipments. However, it is unlikely that the restrictions will be lifted as Washington had hoped.

The conflicts have not been resolved, even though trade policy has calmed down a bit. Commerzbank wrote in a report that gold is likely to continue being sought after as a "safe haven".

Silver spot rose 0.7% per ounce to $48,30. Platinum increased by 0.3% at $1,545.61 while palladium rose 0.7% to $1,385. All three metals are heading for losses this week. (Reporting and editing by Sahal Muhammad, Noel John in Bengaluru, Kavya Baliaraman in Bengaluru)

(source: Reuters)