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Gold prices soared to new highs on Wednesday, as the U.S. government entered its first shutdown in almost seven years after lawmakers failed to reach a deal on government funding.
While the impact of government shutdowns on markets is usually minimal, the timing of this one is significant. Critical U.S. jobs data due to be published on Friday will be delayed, clouding the outlook for the Federal Reserve just weeks ahead of its next meeting. President Donald Trump has also threatened to use the shutdown to cut “a lot” of federal employees, who are ordinarily furloughed during a shutdown and brought back to work once it ends.
With no clear path toward a deal, it’s also unclear how long the shutdown will last. During Trump’s first term in office, a 34-day partial shutdown took hold — the longest in history.
Amid the uncertainty, risk assets lost ground, while gold — typically viewed as a safe haven asset in times of economic or geopolitical turbulence — continued its bumper rally to hit its 39th record high this year.
