Gold Nears Sky High! US Shutdown a Trigger
Gold prices continue to rise and are now approaching a record high, amid concerns about a possible government shutdown in the United States. Spot gold was trading around $3,865 per ounce on Wednesday morning Singapore time, just under $10 off the record set on Tuesday.
This surge in gold prices occurred as investors sought safe havens amid uncertainty. So far, gold prices have risen more than 47% through 2025, making it the largest annual increase since 1979. This increase was driven by massive central bank purchases and increased interest in gold-backed ETFs.
The political situation in Washington is also in focus. If there is no agreement between Democrats and Republicans on government funding by midnight local time, the first government shutdown in nearly seven years could occur. This could potentially delay important economic data such as the US employment report scheduled for Friday.
Meanwhile, statements from US central bank officials added to the uncertainty. Boston Fed President Susan Collins said additional interest rate cuts may be needed due to a weakening labor market. However, there are also warnings about lingering inflationary pressures. This situation has made investors increasingly attracted to gold as a hedge. (ads)
Source: Bloomberg.com
