Gold prices jump on US government shutdown risk, staying near all-time high

Gold (GC=F)

Gold prices jumped again on Monday morning, sustaining a year-to-date rally as investors have bet on haven assets in times of geopolitical uncertainty.

On Monday, the rally was supported by fears of a potential US government shutdown and a weak dollar. President Donald Trump is planning a bipartisan gathering of the top four US congressional leaders at the White House on Monday. The shutdown will happen unless Congress can reach a funding agreement before the start of the new fiscal year, on 1 October.

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Without that money, many parts of the government cannot operate and federal agencies would be forced to cease all non-essential functions until Congress acts.

A shutdown would threaten the release of key data including Friday’s payrolls report, which economists expect to show subdued jobs growth in September.

The president accused democratic leaders Hakeem Jeffries and Chuck Schumer of making “unserious and ridiculous demands” in return for Democratic votes to support a Republican funding agreement to keep the government open beyond Tuesday night – but left the door open for a meeting “if they get serious about the future of our nation”.

Gold futures contracts (GC=F) were more than 1% higher by mid-morning in London, trading around the $3,745.60 per troy ounce mark. Spot gold prices rose 1.6% to $3,818.

"Ultimately, the budget impasse holds a mirror up to longer-term concerns about fiscal deficits and unsustainable spending," said Neil Wilson, UK investor strategist at Saxo Markets. "Something we know all about here in Britain."

A weaker dollar tends to make gold more attractive for most buyers of precious metals.

COMEX - Delayed Quote•USD

(GC=F)

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3,840.30

+31.30

+(0.82%)

As of 5:42:36 AM EDT. Market Open. Advanced Chart

Oil (BZ=F, CL=F)

Oil prices swung lower on Monday following a week of gains, amid signals that Opec+ will hike production again in November, stoking concerns about oversupply. The restart of a pipeline from Iraq added to those worries.

Brent crude futures (BZ=F) dipped around 1.1%, to $69.38 a barrel. Last week, crude futures had advanced more than 3%. West Texas Intermediate (CL=F) fell nearly 1.5% to trade at $64.76.

Bloomberg reported that Opec+ is considering raising output by at least as much as the 137,000 barrel-a-day hike scheduled for next month, citing people familiar with the plans.

NY Mercantile - Delayed Quote•USD

(BZ=F)

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68.26

-0.96

(-1.39%)

As of 5:42:31 AM EDT. Market Open. BZ=FCL=F

Advanced Chart

Pound (GBPUSD=X, GBPEUR=X)

The pound moved higher against the dollar on Monday as fears of a US government shutdown buoyed sterling and pushed the greenback lower.

Currency traders dealing in pounds and dollars will be closely watching chancellor Rachel Reeeves' Labour party conference speech at noon today for clues ahead of her autumn budget.

Story Continues

The chancellor will roll out the latest stable of Labour economic policies officially on 26 November.

Sterling headed about 0.3% higher against the greenback, to trade around the $1.344 mark. This year, the pound has gained around 7% against the world's reserve currency.

The dollar index (DX-Y.NYB), which tracks the dollar against six other currencies, was about 0.2% lower.

CCY - Delayed Quote•USD

(GBPUSD=X)

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1.3435

+0.0033

+(0.24%)

As of 10:51:51 AM GMT+1. Market Open. Advanced Chart

The pound also rose slightly against the euro, ticking up 0.1% to 1.146. For the year-to-date, sterling has lost about 5% of its value compared with the euro.

ICE Futures•USD

(DX-Y.NYB)

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97.95

-0.20

(-0.20%)

As of 5:42:35 AM EDT. Market Open. Advanced Chart

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