FX.co ★ Gold Eases from Record High

Gold prices retreated to $3,840 per ounce on Thursday, slightly down from their previous record high of $3,895. This decline was driven by investors capitalizing on profits and reevaluating the sustainability of the recent rally, which has been fueled by a combination of safe-haven demand and expectations of lower interest rates. Meanwhile, US Congressional discussions showed limited progress in resolving the ongoing government shutdown, a situation that poses risks to key economic activities and reinforces President Trump's assertion that a substantial number of government employees might face layoffs. The shutdown has also delayed the release of critical labor statistics, heightening market concerns over employment pressures. Notably, ADP payroll data indicated declines for two consecutive months, a trend not seen since the Covid-19 crisis in the second quarter of 2020. Additionally, the JOLTS report revealed a significant drop in voluntary job departures, and the Challenger job cut report hinted at reduced hiring activity. These developments have reinforced the market's expectations for two more interest rate cuts by the Federal Reserve this year, despite ongoing inflationary challenges.