By Noel John
(Reuters) -Gold prices ticked up on Wednesday, ahead of a U.S. House of Representatives vote to reopen the government that could restart the flow of economic data and set the stage for the Federal Reserve to cut interest rates in December.
Spot gold was up 0.3% at $4,137.95 per ounce, as of 09:41 a.m. (1158 GMT). U.S. gold futures for December delivery rose 0.7% to $4,143.30 per ounce.
“Gold is holding recent gains as the House votes to end the government shutdown today. Recent price action would suggest that any hiccups on House approval, like a delay, would cause both stocks and precious metals to stumble quickly,” said Tai Wong, an independent metals trader.
Wall Street opened higher with the Dow at a record high, as investors cheered a likely end to the longest U.S. government shutdown. [.N]
The Republican-controlled House of Representatives is due to vote later in the day on a deal to end the longest government shutdown in U.S. history. The 42-day shutdown has weighed on the economy and halted government data, prompting policymakers and markets to rely on private indicators to gauge the state of the economy.
Tuesday’s weekly jobs data from ADP showed private employers shed an average of 11,250 jobs a week in the four weeks ending October 25, signalling continued weakness in the labor market.
Traders now see a 63% probability of a 25-basis-point rate cut at the Fed’s meeting in December, according to CME Group’s FedWatch tool.
Non-yielding gold tends to do well in low-interest rate environments and during times of economic uncertainty.
“Gold has consolidated for a little while around the $4,000/oz level, but the underlying trend remains up,” analysts at SEB Research said in a note.
“Unless global liquidity suddenly tightens or the dollar makes a lasting break higher, the path of least resistance for gold is for higher levels.”
Elsewhere, spot silver gained 1.8% to $52.16 per ounce, platinum rose 0.3% to $1,589.18 and palladium was up 0.1% to $1,445.70.
(Reporting by Noel John in Bengaluru; Editing by Leroy Leo)
