Gold hits fresh all-time high as U.S. government shutdown dents risk appetite

Core Viewpoint - Gold prices have reached record highs due to the U.S. government entering its first shutdown in nearly seven years, following a failure to reach a funding deal [1][2]. Market Impact - The current government shutdown is significant as it coincides with the delay of critical U.S. jobs data, which clouds the Federal Reserve's outlook ahead of its next meeting [2]. - Historical data shows that while government shutdowns typically have minimal market impact, the current situation may differ due to its timing and the ongoing economic uncertainties [2][4]. Gold Market Dynamics - Gold has been viewed as a safe haven asset, and its price surged to $3,893.06 per ounce, with U.S. gold futures reaching $3,918.10 [5]. - The rise in gold prices is attributed to various factors, including political instability, ongoing conflicts, and newly announced tariffs, which have created an unstable investment environment [6]. Future Projections - Analysts believe gold could surpass the $4,000 mark, driven by increased investor interest and a shift away from traditional investment strategies [7][8]. - UBS anticipates that gold's bull run will continue in the coming quarters, supported by rising investor positions and a broadening investor base, with expectations of a tapering rally towards the end of 2026 [10]. Strategic Asset Allocation - There is a structural shift in gold's role, with expectations that it will become a core part of strategic asset allocations, leading to stabilization at historically higher price levels in the long run [11].