Gold Near Record Highs as US Shutdown Fuels Safe-Haven Demand

Gold prices continued their upward march on Friday, hovering close to all-time highs and eyeing a seventh consecutive weekly gain. Investors are increasingly turning to the precious metal as a safe-haven amid growing concerns over the economic impact of a prolonged U.S. government shutdown.

Record Levels and Weekly Gains

Spot gold rose 0.7% to $3,884.19 per ounce, after briefly touching a record high of $3,896.49 on Thursday. The precious metal has gained over 3% this week alone, reflecting strong investor interest. U.S. gold futures for December delivery also settled above $3,908 per ounce, marking more than a 1% rise.

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Government Shutdown Sparks Market Caution

The U.S. government shutdown has entered its third day, with the Senate preparing to vote again on competing Democratic and Republican proposals. Market participants remain cautious, as no clear path to resolution has emerged. The uncertainty is feeding demand for gold, historically seen as a safe store of value during turbulent times.

Economic Signals and Rate Cut Speculation

The delay of the U.S. non-farm payrolls report has shifted investor focus to alternative indicators, which suggest a cooling labor market. Traders are now pricing in a 97% probability of a 25-basis-point rate cut in October, followed by an 85% likelihood of another reduction in December, according to CME Group’s FedWatch tool. Lower interest rates generally boost gold, making it a more attractive investment.

Other Metals on the Rise

The rally extends beyond gold. Spot silver climbed 2.1% to $47.96 per ounce, platinum rose 2.4% to $1,606.29 per ounce, and palladium gained 1.5% to $1,259.41 per ounce. These gains highlight broader strength across precious metals markets.

Outlook for Gold

With gold up over 47% this year, many investors see room for further upside. Analysts suggest that continued economic uncertainty, combined with expectations of falling real interest rates and a weaker U.S. dollar, could propel gold toward $4,200 per ounce in the coming months.