Market News

Yihui Xie and Preeti Soni

(Bloomberg) -- Gold rose for a second day as investors awaited minutes of the Federal Reserve’s last meeting in a key week for US data, and a poll ranked the commodity as one of the more favored assets for next year.

Bullion climbed as much as 0.8% in a second day of gains. A high-stakes earnings report from Nvidia Corp. later Wednesday will present the next test for investors uneasy about the stratospheric valuations of stocks linked to artificial-intelligence developments.

The precious metal traded around $4,090 an ounce despite a drop in global equities, a trend that can sometimes affect gold by forcing traders to unwind leveraged positions.

“The price action highlights how forced selling from leveraged traders in a rising-volatility environment is being steadily absorbed by longer-term investors and central banks,” said Ole Hansen, head of commodities strategy at Saxo Bank A/S. This would “build the foundation” for another push higher in 2026, he added.

Gold has gained around 55% this year, and is still on track for its best year since 1979 despite pulling back from a record high last month. It’s been supported by elevated central-bank buying and a rush by investors to hedge against risk from sovereign debt and currencies.

When compared against major global currencies, global investors expect bullion to post the second-best returns next year, with only the yen a better bet, a Bank of America Corp. survey showed.

Meanwhile, the longest government shutdown in US history has muddied traders’ view of the economy by delaying key data. Amid this vacuum, expectations of a rate cut were dampened this week by comments from several Federal Reserve policymakers. Interest-rate swaps now imply about a 50-50 chance of a December reduction after all but pricing in a quarter-point move just two weeks ago.

A key clue on the health of the US jobs market is expected Thursday, when the Bureau of Labor Statistics is set to release the September jobs report. The figures, though dated, will help shed light on the state of the world’s largest economy after the six-week shutdown.

Fed policy will also be under scrutiny when the minutes of the Oct. 28-29 meeting of the Federal Open Market Committee are released later on Wednesday. These could include insights into when it will begin growing its balance sheet through reserve management purchases. More liquidity in the financial system and a pivot to looser monetary policy will likely benefit precious metals.

Gold rose 0.6% to $4,090.64 an ounce as of 9:36 a.m. in London. The Bloomberg Dollar Spot Index rose 0.1%. Silver, palladium and platinum all traded more than 1% higher.

--With assistance from Jack Ryan.