Gold drives toward $4,000 as U.S. government shutdown drags on

Core Insights - Gold prices have reached a new record, approaching $4,000 per ounce, driven by anticipated US interest rate cuts and the potential for a prolonged federal government shutdown [1] - The economic outlook remains uncertain due to delayed key data from the US shutdown, leading traders to rely on private reports for market signals [2] - Central bank purchases and geopolitical uncertainties have contributed to the rising demand for gold, as investors seek to diversify away from the US dollar [4] Group 1: Market Dynamics - Gold rallied by 2.2% to exceed $3,970 per ounce, marking a more than 50% increase this year [1] - Traders are pricing in a quarter-point interest rate cut this month, which would further benefit gold as it does not yield interest [2] - Options traders are increasing bullish positions in gold ETFs, with significant bets on further price gains [3] Group 2: Investment Trends - Private investors have significantly increased their holdings in gold-backed exchange-traded funds, with the largest monthly expansion in over three years [5] - Fund flows into gold have been described as "remarkable," indicating a strong "buy-the-dip-in-gold" mentality among investors [5] - The overall market backdrop remains supportive for gold, with expectations of further rate cuts and a weakening labor market [6]