Gold prices hit new record with US shutdown, weak job data
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A weaker dollar has added further support to gold, making it cheaper for overseas buyers.
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A collection of gold coins is displayed at a shop in the St. Vincent Jewelry Center in the Jewelry District of Los Angeles, Wednesday, April 30, 2025. (AP Photo/Jae C. Hong)
Gold surged to another record on Wednesday as political and economic uncertainty in the US fueled demand for safe-haven assets.
The rally, which has already lifted gold nearly 50% this year, is now being propelled by the government shutdown and weaker-than-expected labor market data, both of which strengthened expectations of Federal Reserve rate cuts.
Spot gold touched an all-time high of $3,875.32 per ounce before settling around $3,860.13, while December futures rose to $3,887.40. Analysts say the momentum could soon push prices toward $3,900-$4,000, especially if the Federal Reserve chooses lower interest rates a second time.
The shutdown, triggered by partisan deadlock in Washington, has paralyzed federal operations and is expected to delay key economic reports, including Friday’s non-farm payrolls release. Earlier labor market indicators already pointed to slowing hiring, reinforcing bets on at least two rate cuts this year.
Dollar weakness adds fuel
A weaker dollar has added further support to gold, making it cheaper for overseas buyers. The dollar index slipped to a one-week low, while Wall Street futures also fell, reflecting broader investor caution.
"Concerns over a weaker dollar, the political standoff in Washington, and general geopolitical uncertainty are keeping the outlook bullish, said Nicholas Frappell of ABC Refinery, noting to Reuters that the next resistance lies above $3,900.
Gold has now gained more than 47% in 2025, underscoring its role as a hedge against economic and political turbulence in a low-interest-rate environment.
Other precious metals followed mixed trends. For example, silver advanced 0.5% to $46.90 per ounce, its strongest level in over 14 years, while platinum and palladium edged lower.
With markets in China, the world’s largest consumer of gold, closed until October 9 for holidays, traders expect volatility to remain high in the coming sessions.
