Thursday, October 2, 2025 - Gold prices surged to a record high on Wednesday, October 1, as Wall Street futures slipped and the dollar weakened, following the shutdown of the US government after lawmakers failed to agree on a funding deal. While the deadlock weighed on US markets, most Asian and European bourses managed to edge higher.
The closure, which began after the fiscal year ended on
Tuesday, September 30, is the result of Democrats and Republicans failing to
compromise on a temporary spending measure. Senate Republicans attempted to
fast-track a House-passed bill, but were unable to secure the Democratic votes
needed to send it to President Donald Trump for approval.
Democrats are demanding the restoration of hundreds of
billions of dollars in healthcare funding for low-income households, which the
Trump administration intends to cut. The stalemate has triggered the suspension
of non-essential federal operations, leaving hundreds of thousands of civil
servants without pay and raising concerns over disruptions to social safety net
payments.
At a White House event, Trump threatened that the stoppage
would hit Democrats hardest, saying: “So we’d be laying off a lot of people
that are going to be very affected. And they’re Democrats, they’re going to be
Democrats. We’ll use the pause to get rid of a lot of things we didn’t want,
and they’d be Democrat things.”
Republican House Speaker Mike Johnson accused the opposition
of responsibility, posting on X: “Democrats have officially voted to CLOSE the
government.”
Democratic leaders Chuck Schumer and Hakeem Jeffries
countered in a joint statement, saying their party was “ready to find a
bipartisan path forward to reopen the government in a way that lowers costs and
addresses the Republican healthcare crisis.”
Investors fear the shutdown could delay the release of key
economic data, including Friday’s non-farm payrolls report, a critical gauge
for the Federal Reserve’s next rate decision.
Safe-haven gold reached an unprecedented $3,875.53 per ounce
on the back of the shutdown, a weaker dollar, and expectations of lower
borrowing costs. Futures contracts for all three major New York indexes were
lower, with the Dow retreating from a record high.
Asian markets largely shrugged off the turmoil, with
Singapore, Seoul, Wellington, Taipei, Manila, Mumbai, Bangkok and Jakarta all
trading in positive territory alongside London. Tokyo, Paris and Frankfurt
slipped, while Sydney ended flat. Hong Kong and Shanghai remained shut for
holidays.
Currency markets reflected the uncertainty, with the dollar
falling against major peers. The euro rose to $1.1768, while the yen
strengthened slightly to 147.21 per dollar. The pound dipped to $1.3468.
India’s rupee gained marginally after the central bank kept interest rates
steady, though it remained near record lows amid trade and tariff concerns with
Washington.
In commodities, US benchmark WTI crude rose 0.4 percent to
$62.59 per barrel, while Brent gained the same margin to $66.28.
Meanwhile, Australian mining giant BHP slid 2.5 percent
after reports that China had instructed steelmakers to halt purchases of
dollar-denominated seaborne cargoes from the company in a pricing dispute.
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