Gold Hits Two-Week High as US Shutdown Nears End

Gold climbed over $4,070 per ounce on Monday morning, its highest level since late October, as weak US jobs data and optimism over a deal to end the federal shutdown weighed on the US dollar. The Australian dollar rose after a hawkish speech from the RBA’s deputy governor, while Brent crude advanced to $64 a barrel and WTI to $60 before slipping back. Nasdaq futures are up around 1.2% and S&P 500 futures rose 0.7% after the US Senate advanced legislation to fund the government until January.

Equities

The FTSE 100 fell 0.6% on Friday, extending weekly losses to 0.4% as earnings news weighed on several major stocks. The mid-cap FTSE 250 also slipped 0.6%, bringing its weekly decline to 1.9%.

Travel and leisure shares were among the weakest performers, with IAG dropping 11.6%, its steepest single-day fall since 2021, after the British Airways owner flagged softer demand in the US market. Property portal Rightmove slid 12.5% to its lowest level since late 2023 after warning that profit growth would slow next year, while the broader real estate sector fell 1%.

There were some bright spots. ITV shares jumped 16.6% after the broadcaster confirmed it is in early talks to sell its television business to Sky, owned by Comcast, in a potential £1.6 billion deal. The move helped offset weakness elsewhere in the index.

Reports in The Times suggested that Finance Minister Rachel Reeves is preparing to raise income tax in the 26 November budget, possibly adding to the caution around UK assets.

Across the Atlantic, US stocks ended Friday mixed after a volatile session. The Dow Jones rose 0.16%, the S&P 500 added 0.13%, and the Nasdaq fell 0.21% as investors weighed progress on talks to end the longest-ever federal government shutdown.

Tesla shares fell 3.7% after shareholders approved a record $1 trillion pay package for CEO Elon Musk. Microchip Technology lost 5.2% after forecasting quarterly net sales below expectations, while Block slumped 7.7% after missing third-quarter profit estimates. Take-Two Interactive declined 8.1% after delaying the release of Grand Theft Auto VI to November 2026.

Among gainers, Expedia soared 17.6% after lifting its annual revenue growth forecast on strong business-to-business bookings.

In broader earnings news, 446 S&P 500 companies have now reported results, with 83% beating forecasts according to LSEG data.

Forex & Commodities

The Australian dollar rose on Monday, trading at $0.653 against the US dollar after a hawkish speech from Reserve Bank of Australia Deputy Governor Andrew Hauser, who said domestic financial conditions were now close to a neutral rate.

The move was reinforced by optimism that the US government shutdown could soon end, lifting growth sentiment. Against the Japanese yen, the dollar strengthened to ¥154 as traders reacted to signs that Prime Minister Sanae Takaichi may relax Japan’s fiscal consolidation targets. The Bank of Japan’s latest summary of opinions also said the economic outlook had become clearer since July, adding weight to speculation over a possible rate hike in December.

The US dollar was little changed against European currencies, trading at $1.1567 against the euro, $1.3157 versus sterling and 0.8060 to the Swiss franc. The US Senate advanced a bill late on Sunday to reopen the government, with prediction markets assigning a 92% chance of the shutdown ending before 15 November.

Market expectations now imply roughly a 60% chance of a Federal Reserve rate cut in December, though this could shift once withheld economic data such as non-farm payrolls are released.

In commodities, spot gold climbed to $4,078 per ounce on Monday, its highest level since 27 October, as weak US jobs data and a drop in consumer sentiment last week boosted rate cut expectations. Silver rose to $49.79 per ounce, platinum reached $1,570 and palladium traded at $1,399.

Brent crude gained to $64.13 a barrel and US WTI rose to $60.28 as hopes of an end to the US shutdown outweighed concerns over rising global oil inventories.