Gold Surges to Record as US Government Shutdown Boosts Havens

(Bloomberg) -- Gold reached a new all-time high as the US began a government shutdown on Wednesday, threatening upheaval including delays to key economic data releases.

Bullion rose to touch $3,895.38 an ounce, rallying for a fifth day. That came as a stop-gap funding package in Washington failed and the White House instructed government agencies to “execute their plans for an orderly shutdown” — the first in seven years.

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A suspension in federal operations risks adding further pressure on the dollar, while the release of data critical to assessing the health of the US economy, including Friday’s non-farm payroll numbers, may be delayed.

Bullion has soared more than 46% this year, putting it on track for the biggest annual gain since 1979. The rally has been supported by central-bank buying and rising holdings in gold-backed exchange-traded funds as the Federal Reserve resumed interest-rate cuts. Monthly ETF inflows in September were the largest in three years, according to data compiled by Bloomberg.

Gold has also drawn strong haven demand amid lingering concerns about the central bank’s independence.

The US Supreme Court refused to allow President Donald Trump to immediately oust Federal Reserve Governor Lisa Cook while she sues to keep her job, dealing a setback to his efforts to exert more control over the central bank. The order issued Wednesday means Cook can remain in her position at least until the justices rule after hearing arguments in the case in January.

Meanwhile, Trump called Fed Chair Powell an “OBSTRUCTIONIST” in a social media post on Wednesday.

Silver, meanwhile, jumped as much as 2.5% to $47.8290 an ounce — less than 4% from an all-time high. The cheaper precious metal is up more than 60% this year, with gains underpinned by some of the same macro factors driving gold, as well as persistent market tightness as several years of supply deficits come to a head.

Spot gold was up 0.1% at $3,864.20 an ounce at 2:39 p.m. in New York. The Bloomberg Dollar Spot Index was little-changed. Silver was trading 1.7% higher. Platinum and palladium both fell.

--With assistance from Yihui Xie, Preeti Soni, Jack Ryan and Yvonne Yue Li.

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