Gold holds gains as traders contend with data void on US economy

Gold was steady after rising almost 2% on Wednesday, as traders weighed an uncertain US economic outlook compounded by an absence of reliable data during a six-week shutdown.

Bullion was trading around $4,200 an ounce on Thursday, consolidating four days of gains — the longest winning streak in a month. While US lawmakers passed a temporary funding bill to end the longest government shutdown in history, the White House has warned that official jobs and inflation reports for October are unlikely to be released.

The data void throughout the shutdown has caused investors to fly blind or rely on private statistics for a temperature check on the world’s largest economy. Gold has gained nearly 5% this week, partly in expectation of further interest-rate cuts after Washington returns to work — a positive for the metal, which doesn’t pay interest.

But policymakers are divided on the need for further reductions to the cost of borrowing. Federal Reserve Bank of Atlanta President Raphael Bostic and Bank of Boston President Susan Collins both said they favored keeping interest rates steady to cool inflation.

“A lack of official economic data and concerns around the level of monetary policy restrictiveness has resulted in muddled expectations around the Fed’s upcoming December decision,” TD Securities analysts including Oscar Munoz said in a note. “Data settles debates, while lack of data leads to entrenched policy views.”

Gold is up nearly 60% this year and remains on track for its best annual performance since 1979. Central banks have stepped up purchases, seeking a store of value and asset diversification, while investors have piled into the metal as a hedge against growing fiscal unease in some of the world’s biggest economies.

Though the price has retreated from last month’s record above $4,380 on concerns a ferocious rally had run too far, too fast, several investors are forecasting another advance to $5,000 and beyond next year. China has been a leader among central-bank buyers, supporting its aim of building a world less dependent on US-centric financial markets.

Gold edged up 0.2% to $4,205.50 an ounce as of 11:21 a.m. Singapore time. The Bloomberg Dollar Spot Index was largely unchanged. Silver edged higher to approach a record. Platinum fell slightly, while palladium gained.