Gold surged to fresh all-time highs as the U.S. government officially entered a shutdown, intensifying investor demand for safe-haven assets. Spot gold pushed past $3,895/oz during trading hours while U.S. gold futures for December delivery extended gains to hit a high of $3,922.70. Both pulled back slightly during mid-day trade on Wednesday.
In September alone, gold jumped by more than 11%, marking its strongest monthly performance in over a decade. That rally already set the stage before the shutdown intensified the uptrend.
Shutdown spurs flight to gold
Government shutdowns don’t usually shake the markets much, but this one comes at a tricky time. Important U.S. jobs data report expected on Friday will be postponed, making it harder for the Federal Reserve to plan its next move. President Donald Trump has also warned he might use the shutdown to permanently cut many federal jobs, instead of just temporarily sending workers home like usual.
At the same time, weak labor market snapshots have fueled stronger expectations that the Fed will cut rates soon, a pivot that tends to support non-yielding assets like gold. Another contributing factor is a weaker U.S. dollar. As it slides against other currencies, gold becomes relatively cheaper for overseas buyers, further bolstering demand.
According to a Reuters report, spot silver gained 1.4% to $47.33 per ounce, a more than 14-year high. Platinum fell 0.5% to $1,566.30, and palladium was down 1.4% at $1,239.97 on Wednesday.