Gold Hits New High as US Government Shutdown Raises Uncertainty

Web Editor

October 1, 2025

a person in white gloves and gloves is placing gold bars on a table with a gold seal in the backgrou

Background on Key Figures and Relevance

The United States government shutdown has led to a rise in gold prices, with the precious metal reaching another historical maximum. This situation has significant implications for federal employees and the broader economy.

Edward Meir, an analyst at Marex, plays a crucial role in understanding the current market dynamics. His insights shed light on how political divisions and government closures affect currency values, stock markets, and gold prices.

Government Shutdown Impacts and Economic Indicators

The ongoing US government shutdown has forced the closure of many federal operations, potentially jeopardizing thousands of federal jobs. This impasse stems from partisan divisions preventing the Congress and White House from reaching a funding agreement.

  • The shutdown may delay the release of crucial economic indicators, including the much-anticipated nonfarm payrolls report on Friday.
  • Meir explains that a government shutdown typically casts a negative shadow over the US economy, affecting both the dollar and stock markets.

ADP Employment Report and Its Implications

According to ADP Research data released on Wednesday, private-sector employment decreased by 32,000 jobs in September following an earlier revision of a 3,000 job reduction in August.

Experts surveyed by Reuters had forecasted a 50,000 job increase. Meir emphasizes that the weak employment report, combined with a slowing economy and lower interest rates, supports gold as a safe-haven asset.

Market Expectations for Fed Interest Rate Cuts

Investors widely anticipate, with a 99% probability, another interest rate reduction by the Federal Open Market Committee (FOMC) in their upcoming meeting, according to CME Group’s FedWatch tool.

Gold Price Outlook and Other Precious Metals

Felipe Mendoza, an analyst at ATFX LATAM, expects a mixed scenario for gold in October. Factors such as potential Fed rate cuts, a structurally weak dollar, and fiscal tensions in the US could bolster gold as a safe-haven asset.

Mendoza highlights that market participants will closely monitor inflation data, employment figures, and the evolving fiscal landscape in the US to determine whether gold will establish a new price range between $3,800 and $3,900 or experience a partial correction before attempting another all-time high.

Performance of Other Precious Metals

Silver saw a 1.6% increase, trading at $47.42 per ounce and reaching its highest level in over 14 years. Meanwhile, platinum experienced a 1.6% decline, trading at $1,549.17 per ounce.

Key Questions and Answers

  • Q: What is causing the rise in gold prices? A: The US government shutdown, weakening dollar, and expectations of further interest rate cuts by the Federal Reserve are driving gold prices higher.
  • Q: How does the government shutdown affect the economy? A: It may delay crucial economic indicators, put federal jobs at risk, and cast a negative shadow over the US economy.
  • Q: What is the current outlook for gold prices? A: Analysts expect a mixed scenario for gold in October, with factors such as potential Fed rate cuts, a weak dollar, and fiscal tensions in the US supporting gold as a safe-haven asset.
  • Q: How have other precious metals performed? A: Silver has reached its highest level in over 14 years, while platinum experienced a decline.