Gold prices traded in record territory during Wednesday's Asian trade, with investors turning to the precious metal as the United States government shut down.
By 3:30 pm AEST (5:30 am GMT), spot gold was up $6.35, or 0.2%, at US$3,865.10 per ounce.
The gains extend gold’s rally into the final quarter of 2025, keeping momentum intact above all-time highs as traders brace for heightened political and economic uncertainty in Washington.
Market sentiment remains underpinned by the failure of the Republican-controlled Senate and Democrats to secure a last-minute funding deal, forcing a government shutdown after midnight.
The last major stoppage, during Donald Trump’s first presidential term, lasted 35 days between December 2018 and January 2019.
This time, investors are especially focused on the economic fallout. A shutdown would delay the release of key government data, including the September nonfarm payrolls report due on Friday.
The absence of official jobs data would leave markets relying more heavily on the ADP private payrolls report, due Wednesday, for clues on labour market conditions.
The shutdown risk comes as markets are already pricing in further monetary easing. According to the CME Group FedWatch Tool, investors fully expect the Federal Reserve to deliver a 25 basis-point rate cut later this month, with an additional cut likely before year-end.
The uncertainty has boosted gold’s traditional role as a safe-haven asset, particularly as the U.S. dollar continues to face pressure.
The greenback was hit further on Tuesday by a mixed job openings and labor turnover survey (JOLTs), which showed a modest 19,000 increase in openings in August but a decline in overall hiring, reinforcing concerns about a weakening labour market.
Analysts said the convergence of fiscal gridlock, a softer U.S. economy, and a dovish Fed outlook is supporting gold’s upward trajectory.
With both political and monetary policy in flux, investor appetite for the metal is expected to remain strong in the near term.
All eyes now turn to the ADP payrolls report, which could set the tone for gold and broader market sentiment for the rest of the week.
