Gold turns higher as consumer sentiment crumbles, government shutdown drags on

[stack of shiny gold bars 3d illustration]
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Gold futures edged higher Friday, as a weaker U.S. dollar and concerns over the prolonged U.S. government shutdown on its record 37th day helped lift safe-haven demand, while deteriorating U.S. consumer sentiment raised concerns that weakening consumption could tip the economy into recession.

Amid persistent price increases and the extended government shutdown, the University of Michigan's preliminary consumer sentiment index for November fell by more than expected, to 50.3 from 53.6 in October.

Meanwhile, the Federal Aviation Administration ordered a 10% cut in traffic at 40 major airports starting Friday, a move that could affect 3,500-4,000 flights daily.

The three benchmark stock market indexes closed in the red this week, with the Nasdaq down 3% - its worst weekly performance since early April - on fears about elevated tech sector valuations.

Analysts at Macquarie Group said they believe gold prices likely have peaked.

"With global growth beginning to rebound, central bank easing cycles near an end, real interest rates still relatively high and tensions between the U.S. and China easing (at least for now), we suspect the near-term peak is in, with prices likely to fall over the coming year," Macquarie chief economist Ric Deverell said in a research note.

"However, the decline will likely be slower than seen after previous peaks, with prices remaining well above the end-2023 level through the current U.S. presidential term," when gold was near $2,000, Deverell wrote.

Front-month Comex gold (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) and silver (XAGUSD:CUR [https://seekingalpha.com/symbol/XAGUSD:CUR]) for November delivery both closed +0.5% on Friday to $3,999.40/oz and $48.017/oz, respectively; for the week, gold gained 0.4% and silver finished roughly flat.

ETFs: (GLD [https://seekingalpha.com/symbol/GLD]), (GDX [https://seekingalpha.com/symbol/GDX]), ((GDXJ), (IAU [https://seekingalpha.com/symbol/IAU]), (NUGT [https://seekingalpha.com/symbol/NUGT]), (PHYS [https://seekingalpha.com/symbol/PHYS]), (GLDM [https://seekingalpha.com/symbol/GLDM]), (AAAU [https://seekingalpha.com/symbol/AAAU]), (SGOL [https://seekingalpha.com/symbol/SGOL]), (RING [https://seekingalpha.com/symbol/RING]), (BAR [https://seekingalpha.com/symbol/BAR]), (OUNZ [https://seekingalpha.com/symbol/OUNZ]), (SLV [https://seekingalpha.com/symbol/SLV]), (PSLV [https://seekingalpha.com/symbol/PSLV]), (SIVR [https://seekingalpha.com/symbol/SIVR]), (SIL [https://seekingalpha.com/symbol/SIL]), (SILJ [https://seekingalpha.com/symbol/SILJ])

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