Safe-haven demand surges as dollar weakens
Gold prices soared to an all-time high on Wednesday, fueled by growing safe-haven demand and a weaker U.S. dollar as investors reacted to a government shutdown and disappointing job market data. Spot gold rose 0.1% to $3,861.77 an ounce, briefly peaking at $3,895.09, while December futures settled 0.6% higher at $3,897.50.
The dollar index fell against a basket of major currencies, making gold — priced in dollars — more attractive for foreign investors. Marex analyst Edward Meir noted that shutdown-related concerns tend to sour sentiment toward the U.S., adding pressure to the greenback and equity markets.
The combination of economic uncertainty and falling yields typically strengthens gold’s appeal, particularly as expectations for a Federal Reserve rate cut this month solidify.
Jobs data intensifies pressure on Fed policy
Fresh labor data added to the gold rally. The ADP report showed private payrolls fell by 32,000 in September, following a revised 3,000 job decline in August. Analysts had expected a gain of 50,000. The weak figures reinforced bets that the Federal Reserve will ease interest rates at its next meeting.
According to the CME FedWatch Tool, investors are now pricing in a 99% chance of a rate cut. Lower interest rates tend to favor non-yielding assets like gold, especially during periods of economic volatility or market uncertainty.
Adding to the uncertainty, the U.S. government shutdown has stalled many federal operations, with thousands of jobs at stake. The closure may also delay key economic reports, including the widely anticipated non-farm payrolls (NFP) data originally scheduled for Friday.
Investors rush in amid ‘FOMO’ and global tension
SP Angel analysts noted that a surge of interest from both institutional and retail Western investors is being driven by “FOMO” — fear of missing out. They suggested that if this buying trend continues, gold could soon break the symbolic $4,000 per ounce mark.
Geopolitical and economic instability often drive investors toward precious metals as safe-haven assets. With rising concerns around U.S. fiscal stability and global monetary policy shifts, gold’s momentum may still have room to grow.
Other precious metals also see movement
While gold stole the spotlight, silver climbed 1.6% to hit a more-than-14-year high of $47.42 per ounce. In contrast, platinum declined by 1.6% to $1,549.17, and palladium fell 1.1% to $1,243.31.
The broader movement across precious metals suggests that investors are rebalancing portfolios amid a mix of inflation concerns, economic instability, and rate expectations.
