Gold scores best week in a month amid economic uncertainty

Gold is heading for its strongest weekly gain in a month, buoyed by economic uncertainty and a unique market squeeze. The rally comes as traders await a flood of delayed U.S. economic data following the end of a government shutdown.

After a recent dip, gold rose above $4,200 an ounce, putting it on track for a 5% weekly increase. Silver saw an even larger jump, gaining over 10% this week.

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Analysts note that the price surge may be amplified by a “gamma squeeze,” a technical scenario where market makers are forced to buy futures, driving prices higher even without new demand from physical buyers.

While the metal has pulled back from its record high last month, it remains up nearly 60% for the year, supported by central bank purchases and its role as a hedge against economic unease.

Traders are now closely watching for signs of economic weakness that could prompt another Federal Reserve rate cut. However, expectations for a December cut have recently fallen to about 50% as Fed officials express caution.