Gold Rush: Haven Demand Propels Price Near Record High

The price of gold is surging, reaching a level near
$3,885 and poised to complete its seventh consecutive weekly gain. This advance is primarily fueled by a prolonged US government shutdown, which has heightened demand for the precious metal as a safe haven asset, alongside persistent expectations that the central bank will maintain an accommodative monetary policy.

The economic landscape remains mixed, providing little clear direction. Recent reports on the services sector indicated uneven momentum: while one survey showed economic expansion, another signaled stagnation right at the point between growth and contraction. The absence of key government economic data, due to the shutdown, has left markets adrift and amplified the focus on central bank officials’ statements.

In this vacuum of official economic figures, central bank policymakers have offered cautious perspectives. One official emphasized the importance of data for setting policy and remained optimistic about future access to economic releases, while another stressed that the bank’s path must remain dependent on incoming data, despite market anticipation of potential rate reductions.

The political deadlock in Washington over the budget has deepened fiscal uncertainty, further boosting the appeal of gold. Investors are increasingly eyeing a re-test of the previous all-time high of $3,896 as the confluence of political uncertainty, mixed economic signals, and dovish central bank outlooks continues to drive gold’s ascent.