Gold prices stabilized as traders weighed the declining likelihood of a US Federal Reserve interest rate cut, with many waiting for a clearer read on economic conditions following a prolonged data blackout.

Spot gold hovered near $4,080 an ounce after sliding more than 2% in the previous session. Confidence in a December rate cut has weakened as Fed officials continue to signal little urgency to lower borrowing costs. Typically, falling interest rates boost the appeal of non-yielding assets like gold.

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Both investors and policymakers are now awaiting a wave of delayed economic reports, held up by the longest US government shutdown on record. The six-week gap in labor and inflation data has made Federal Reserve officials hesitant to commit to additional easing without a more complete picture. Interest rate swaps now show less than a 50% chance of a December cut — a sharp drop from expectations of a nearly certain quarter-point reduction just weeks ago.

“The shutdown may have ended, but the data fog it created still hangs over the markets,” said Hebe Chen, strategist at Vantage Markets in Melbourne. “The numbers coming in over the next few weeks could be highly unpredictable, keeping the Fed’s policy path uncertain.”

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In Asia, gold’s recent pullback has been exacerbated by muted physical demand, according to Manav Modi of Motilal Oswal Financial Services in Mumbai. Indian dealers are now offering heavy discounts after the latest volatility discouraged buyers, he added.

Despite recent turbulence, gold remains up roughly 55% this year and is on track for its strongest annual performance since 1979. A surge to a record above $4,380 last month was supported by robust central-bank purchases, while investors have increasingly turned to precious metals amid rising fiscal concerns in major economies.

Meanwhile, geopolitical tensions intensified as China ramped up pressure on Japan following comments by Prime Minister Sanae Takaichi regarding Taiwan. State media hinted at significant countermeasures after Beijing issued travel warnings — raising fears of potential economic retaliation.

As of 10:41 a.m. in London, gold traded at $— per ounce. The Bloomberg Dollar Spot Index was little changed. Silver advanced, while platinum and palladium declined.