Due to concerns about global political and economic instability, investors are seeking safe havens for their money. As a result, the price of gold has surged to a record high of almost $4,000 (£2,985) per ounce.
Since US President Donald Trump introduced tariffs in April that have disrupted international trade, gold has had its most significant gain since the 1970s, surging by around a third. As the US government shutdown enters its second week, analysts believe that delays in the provision of key economic data are another concern for investors. Gold is regarded as a “safe haven” investment that is likely to hold or appreciate during periods of market volatility or economic downturns.
On Wednesday afternoon, the price of spot gold, which is the current market value of the precious metal for prompt delivery, increased to above $4,036 per ounce in Asia. On October 7, gold futures, a measure of market mood, hit the same level. Futures are contracts to purchase or sell an asset at a specific future date.
A “tailwind for gold prices” is the US government shutdown, which was brought on by a series of deadlocks over public expenditure, according to Christopher Wong, rates strategist at OCBC, a bank based in Singapore. During past US government shutdowns, investors have resorted to safe-haven assets like gold.
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