Gold Surges Past $3,800 for the First Time as Washington Teeters on Shutdown
Gold prices jumped above $3,800 an ounce for the first time, peaking at $3,831 as investors sought a safe place to park cash amid fears of a US government shutdown. The move marks a dramatic 45% gain for the year so far and underscores how political and fiscal stress can push money into gold. The rally reflects investors’ desire for security as markets weigh the risk of a federal shutdown and the broader implications for US finances. Gold’s shine in uncertain times continues to draw buyers who see it as a hedge against political and economic volatility.
In This Article:
Washington Budget Fight Pushes Markets Toward Safe Havens
President Donald Trump held talks with Democratic and Republican leaders to negotiate an extension of government funding. Without a deal, a federal shutdown would begin tomorrow. Analysts say the budget impasse is a stark reminder of longer-term concerns about deficits and unsustainable spending in the United States, a situation that makes safe havens like gold even more attractive to investors.
Gold, Silver and Platinum Rally on Rate-Cut Hopes and Global Tensions
Silver rose to a 14-year high, while platinum hit levels not seen in 12 years. Hopes of further US rate cuts, along with inflation concerns and geopolitical tensions, helped lift prices across the precious metals complex. “Investors are increasingly jumping on the gold bandwagon as safe-haven demand remains strong,” said David Morrison of Trade Nation. “The looming threat of a potential US government shutdown adds to gold’s appeal.”
Two Bids on Gold: ETFs and Central Banks Drive the Rally
The rally has been reinforced by heavy inflows into gold-backed exchange-traded funds (ETFs) that track the metal’s price. At the same time, central banks around the world have been buying gold, reinforcing its appeal as a hedge against dollar weakness. Analysts from Deutsche Bank noted that ETF demand has re-entered the scene with force, creating two strong, competing bids on gold—from central banks and ETF investors.
FOMO and the Markets: Stocks Grow Quietly While Gold Roars
John Reade of the World Gold Council cited fear of missing out, or FOMO, as a factor fueling the rally. The mood in equities also showed resilience amid broader concerns about US and UK growth. In London, the FTSE 100 inched higher, trading near its peak as investors weighed global risks against domestic growth. The index rose to intraday highs before closing modestly up, continuing a year-long ascent of more than 12%.
