Gold prices surged to record levels in Asian trading on Wednesday, following the start of a U.S. government shutdown after Congress failed to approve new federal funding.
Spot gold reached an all-time high of $2,875.53 per ounce, while December gold futures peaked at $3,903.45/oz. By 00:22 ET (04:22 GMT), spot prices had eased slightly to $3,862.22 per ounce.
U.S. Government Halts Operations Amid Congressional Deadlock
The shutdown came into effect at midnight Tuesday (0400 GMT Wednesday), after a last-minute spending bill supported by Republicans failed to pass the Senate due to continued opposition from Democrats.
The political impasse in Washington has fueled demand for safe-haven assets, sending gold to a string of record highs this week and pressuring the U.S. dollar.
Other precious metals have also benefited from the safe-haven demand, with platinum and silver reaching 12- and 14-year peaks, respectively. On Wednesday, spot silver rose 0.9% to $47.0525/oz, while spot platinum dipped 0.3% to $1,572.18/oz.
Industrial metals, which had seen strong gains earlier in the week, experienced slight declines on Wednesday. London Metal Exchange copper futures fell 0.1% to $10,278.10 per ton, while COMEX copper futures dropped 0.7% to $4.8450.
Labor Market Data Faces Possible Delays
The government shutdown is likely to delay the release of key labor market statistics, including the September nonfarm payrolls report scheduled for Friday. The report, a closely watched indicator, provides insight into U.S. employment trends, which influenced the Federal Reserve’s September rate cut.
“Dallas Fed President Lorie Logan flagged heightened caution over future interest rate cuts, stating that the labor market will need to deteriorate further for the central bank to consider more rate cuts,” analysts noted.
A prolonged shutdown could also disrupt subsequent economic data releases, adding uncertainty for markets as investors weigh the outlook for U.S. growth and monetary policy.
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