Gold Prices Hit Highest In Two Weeks Amid Growing Worries About US Economy

• The government shutdown has affected sentiment in the U.S., with the Trump administration moving to cut billions of dollars in SNAP food benefits payments.
• U.S. President Donald Trump floated a $2,000 dividend for all except high-income residents after touting the successes of the administration’s tariffs.
• According to a Bloomberg News report citing state filings, applications for U.S. unemployment benefits rose last week, sequentially.

Gold prices hit a near two-week high in early trading on Monday after tame U.S. economic data bolstered safe-haven inflows into the bullion, despite the higher odds of an end to the U.S. government shutdown.

Spot gold prices rose by more than 1% to hit a session high of $4,053.13 per ounce. This was the highest level since Oct. 28. U.S. gold futures also moved above 1% to $4,054.90 per ounce.

What Is Driving The Bullion Higher?

Gold prices rose last week as economic data raised concerns about a slowdown in the U.S. economy. The University of Michigan’s consumer sentiment index fell to 50.3 in November, from 53.6 last month, while inflation expectations rose to 4.7% from 4.6%. The survey also suggested that 71% of households now expect unemployment to increase over the coming year, while only 9% expect unemployment to decline.

The government shutdown has also affected sentiment in the U.S., with the Trump administration moving to slash billions of payments for the SNAP food benefits program. According to a Bloomberg News report citing state filings, applications for U.S. unemployment benefits rose last week compared with the previous week. Policymakers and markets have relied on unofficial data to gauge the job market, as the Labor Department has not been able to publish the data due to the government shutdown.

U.S. President Donald Trump also floated a $2,000 dividend for all except high-income residents after touting the successes of the administration’s tariffs. Treasury Secretary Scott Bessent later suggested the dividend could be delivered through tax cuts.

According to economist Peter Schiff, an end to the government shutdown would mean “it’s back to business as usual in Washington, D.C.” But he sees deficits and inflation rising, prompting investors to seek alternatives to the depreciating U.S. dollar.

What Are Traders Thinking?

Retail sentiment on Stocktwits about SPDR Gold Shares ETF (GLD) was in ‘bearish’ territory at the time of writing.

“Gold [is] taking off, anticipating bad economic/inflation numbers to come out once the government reopens for good,” one trader said.

“$4000 is the floor now, if Trump does pass $2000 a person stimi, $5000 incoming,” another person suggested.

According to an Associated Press report, a group of centrist Democrats agreed on Sunday to advance a stopgap funding measure to reopen the government without a guaranteed extension of healthcare benefits. However, the bill could still face opposition from the House of Representatives.

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