Gold Climbs Near $4,000 as US Government Shutdown Continues

Core Insights - Gold prices have reached a new record, rising as much as 2.2% to exceed $3,970 per ounce [1] - The recent increase follows seven consecutive weeks of gains, influenced by a US government shutdown that has delayed key economic data, creating uncertainty in the economic outlook [2] - Gold prices have surged over 50% this year, with gold-backed exchange-traded funds (ETFs) seeing significant inflows [3] Market Dynamics - Traders are relying on private reports for market signals due to the lack of official data, while expectations for a quarter-point rate cut by the US central bank could further support gold prices [2] - Options traders are increasing bullish positions in SPDR Gold Shares ETF, with significant trades indicating expectations of further price increases [4] - Central bank purchases have driven gold prices higher as institutions diversify away from the US dollar, contributing to a trend referred to as the "debasement trade" [5] Economic Context - The Federal Reserve's potential path to further rate cuts, combined with a weakening labor market, is seen as a supportive backdrop for gold prices [6] - The Bloomberg Dollar Spot Index has shown a slight increase of 0.3%, while other precious metals like silver, platinum, and palladium have also experienced price increases [6]