Everything’s supposedly rosy on Wall Street—but gold is rallying higher as investors seek safety in government shutdown

Core Insights - Wall Street is currently optimistic, with stocks at high levels and expectations of interest rate cuts, yet gold prices have surged over 45% in the past year, indicating a flight to safety among investors and central banks [1][2][3] - Goldman Sachs projects gold prices to reach $4,300 by late 2026, driven by factors such as diversification from Treasuries, de-dollarization, and geopolitical risks [1][5][6] - The recent Zijin Gold IPO raised nearly 25 billion Hong Kong dollars (approximately $3.2 billion), reflecting the spillover effect of gold's popularity into the stock market [4] Market Sentiment - Despite a rally in the stock market and fading recession risks, there is a notable increase in demand for gold, suggesting that investors are seeking safe-haven assets [2][3] - Analysts believe that any potential market volatility due to a government shutdown will be short-lived, with a quick return to normalcy expected [1] Investment Trends - Gold has outperformed the S&P 500, highlighting a shift in investor preference towards the security of gold over riskier equity markets [3] - Goldman Sachs has identified gold as a "favorite long commodity," citing increased central bank demand and hedging opportunities amid economic uncertainties [5][6]