Gold price rises to $3,875 per ounce

SadaNews - The price of gold continued to gain, reaching a new record level, extending a rising trend for the fourth consecutive day, amid a government shutdown in the United States that may boost demand for safe assets.

Gold in the spot market rose to touch $3,875.53 per ounce, surpassing Tuesday’s peak, while investors awaited the implications of the government shutdown in Washington. Democrats and Republicans failed to reach an agreement before midnight to fund federal operations, leading to the first government shutdown in nearly seven years, a scenario that could delay critical data releases, such as the non-farm payrolls report on Friday.

The largest gains in decades

Gold has jumped more than 47% since the beginning of the year, putting it on track for the largest annual gains since 1979. This rise has been driven by increased purchases from central banks and rising holdings in gold-backed exchange-traded funds, alongside the Federal Reserve's resumption of interest rate cuts. According to data collected by Bloomberg, fund flows in September recorded their highest level in three years.

Susan Collins, President of the Federal Reserve Bank of Boston, stated on Tuesday that further interest rate cuts may be appropriate this year, given the weakness in the labor market, but warned of persistent inflationary pressures.

For his part, Philip Jefferson, Vice President of the Federal Reserve, pointed out that the central bank faces dual challenges of a slowing labor market and rising inflationary pressures, complicating forecasts regarding the future path of monetary policy.

Gains in other metals

As of 10:12 am in Singapore, spot gold rose by 0.3% to $3,872.21 per ounce, after closing up 0.7% in the previous session. Meanwhile, the Bloomberg dollar index remained virtually unchanged.

Silver prices recorded an increase of 1.7% to $47.4317 per ounce, after a decline of 0.6% in the previous session. Both platinum and palladium also rose.