Gold Reaches Record High Amid U.S. Government Shutdown

(MENAFN) Gold prices surged by more than 1.1% on Monday, reaching a record-breaking level of $3,945.12 as of 0500GMT.

This rise came as uncertainty grows due to a federal government shutdown in the United States, while investors speculate that the Federal Reserve may implement additional interest rate reductions in its upcoming meeting.

Following this all-time high, the price of gold settled slightly lower at approximately $3,926.40 by 0620GMT.

Throughout the past year, gold prices fluctuated between $2,536.91 and the new peak of $3,945.12, marking a gain of over 48% over the same timeframe.

Although a government shutdown doesn’t necessarily trigger a full-scale financial crisis, it causes significant interruptions in several sectors of American life.

These disruptions add to the already existing ambiguity surrounding the condition of the largest economy in the world.

During such shutdowns, many government workers face furloughs—either being sent home without pay or required to continue working without compensation—until a new budget is approved.

Every federal department has its own contingency strategy that outlines which staff are deemed essential.

In addition, the shutdown will delay the release of several important economic reports. According to the Bureau of Labor Statistics’ emergency protocol, no economic data will be made public while the government remains closed.

As a result, figures such as "non-farm payrolls," "initial jobless claims," and "inflation" data may not be published on time.

Alongside the complications stemming from the U.S. government shutdown, gold's upward momentum persists.

This continued increase is driven by global political tensions, growing unease regarding the international economy, strong demand for gold from central banks, and expectations surrounding the Fed’s current cycle of interest rate reductions.

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