- Gold hits $3,918 as U.S. shutdown spurs safe-haven demand.
- Analysts predict gold could cross $4,000 amid global uncertainty.
- Investors increasingly diversify into gold, signaling a historic bull run.
Gold prices surged to record highs on Wednesday as the U.S. entered its first government shutdown in nearly seven years, reflecting heightened investor caution amid political and economic uncertainty. Spot gold climbed to $3,893.06 an ounce, while December gold futures touched $3,918.10, marking the 39th record high for the year.
Shutdown Sparks Safe-Haven Rally
While past U.S. government shutdowns have had minimal market impact, timing matters. Crucial U.S. jobs data scheduled for Friday will be delayed, complicating the Federal Reserve’s policy outlook ahead of its next meeting. President Donald Trump has also hinted at using the shutdown to reduce federal employment, adding uncertainty about how long the shutdown might last.
Historically, shutdowns have caused minor swings in equities and the dollar, but gold often benefits as investors seek safe-haven assets. Bank of America data shows that during past shutdowns, the S&P 500 averaged a modest 1% gain, while the 10-year Treasury yield fell an average of 4 basis points, highlighting investor caution.
Gold’s Momentum and $4,000 Target
Market strategists argue that the current surge in gold is part of a broader trend. Michael Field, Morningstar’s chief equity strategist, noted that the shutdown was “just the straw that broke the camel’s back,” with geopolitical tensions, tariffs, and political instability fueling the rally.
Philippe Gijsels of BNP Paribas Fortis believes gold is approaching the $4,000 mark and could go higher, citing growing investor adoption and sticky global inflation. UBS strategist Joni Teves echoed this view, emphasizing that gold remains under-owned and expects the bull run to continue through 2026 before easing with economic recovery.
Also Read: “Don’t Bet Against the Dollar”: Goldman Sachs Warns of Painful Fallout for Short Sellers
Gold’s record-breaking rally reflects more than a temporary market shock. With investors increasingly seeking safety amid global instability, the precious metal is becoming a strategic asset in diversified portfolios. As uncertainty persists, the path toward $4,000 gold appears increasingly plausible, signaling the start of a potentially historic bull market.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. Coin Brief is not responsible for any financial losses.
