The price of gold soared to a new record on Wednesday, reaching $3,895.33 per ounce at 08:30 GMT, after the US government shutdown deepened concerns over economic stability. The metal rose nearly 0.9 percent, building on a year-long rally driven by uncertainty in global markets.
Over the past 12 months, gold has hovered between $2,536.91 and $3,819.80, gaining 45.9 percent. Analysts say the ongoing shutdown standoff between President Donald Trump and congressional Democrats, combined with global economic uncertainty, is pushing investors to safe-haven assets like gold.
Shutdown Disruptions and Market Reaction
The shutdown—caused by a funding deadlock in Washington—has forced federal employees into furloughs and delayed paychecks. Others are required to work without pay until a new budget agreement is reached.
Beyond immediate disruptions to American life, the shutdown is also disrupting the release of key US economic data. According to the Bureau of Labor Statistics’ emergency plan, reports such as non-farm payrolls, jobless claims, and inflation figures will not be published until government operations resume.
This data blackout makes it harder for markets and policymakers to track the state of the economy, adding further uncertainty and driving demand for gold.
Fed Rate Cuts and Global Drivers
Gold’s rally is also being fueled by broader geopolitical tensions, central bank gold purchases, and expectations of further Federal Reserve rate cuts.
Last week, the Fed lowered its benchmark interest rate by 25 basis points under pressure from Trump, who has insisted on looser monetary policy to stimulate growth. Markets now anticipate additional cuts in both October and December, citing weak inflation, rising unemployment, and fragile consumer confidence.
Meanwhile, geopolitical risk across the Middle East and Europe, alongside concerns over slowing Chinese growth, has only heightened the global rush to gold.
What’s Next for Gold?
With the US shutdown unresolved and the Fed’s rate-cutting cycle in motion, many analysts predict that gold could break above the symbolic $4,000 mark before the end of 2025.
Unless lawmakers in Washington can swiftly resolve the deadlock, investors are likely to keep piling into gold, further cementing its role as the world’s most trusted safe-haven asset in times of crisis.
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