Gold prices surged to a new all-time high as the United States government initiated a shutdown on Wednesday (Thursday AEST), sparking concerns over potential disruptions, including delays to crucial economic data releases. Bullion reached $US3895.38 an ounce, marking its fifth consecutive day of gains after a stopgap funding package failed in Washington. The White House has directed government agencies to implement plans for an orderly shutdown, the first in seven years.
The suspension of federal operations poses a risk of increased pressure on the US dollar. Furthermore, the release of key economic indicators, such as Friday’s non-farm payroll numbers, could be delayed. These figures are critical for evaluating the overall health and performance of the American economy.
Gold has experienced a remarkable surge this year, climbing by more than 46 per cent and on track for its largest annual gain since 1979. This rally has been fuelled by central bank purchasing activity and increased holdings in gold-backed exchange-traded funds (ETFs), particularly as the Federal Reserve has resumed cutting interest rates. September saw the largest monthly ETF inflows in three years, according to Bloomberg data.
In addition to these factors, gold has benefited from strong safe-haven demand. Lingering uncertainties regarding the central bank’s independence have further bolstered its appeal as a secure asset during times of economic and political instability.
