Gold Rally Hits Pause as Shutdown Weighs on Stocks: Markets Wrap

(Bloomberg) — Stocks and the dollar slipped as the rising risk of a US government shutdown weighed on most asset classes. Gold’s record-breaking rally came to a halt.

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The metal eased 0.6% after extending record highs earlier in the session. European stocks softened alongside US futures. The dollar slipped, erasing September’s gains. US Treasuries extended their advance

Gold’s rally is hitting pause after a 45% surge this year, underscoring its allure as the Federal Reserve cuts rates, while trade tensions and fading faith in US exceptionalism have bolstered its haven appeal. Traders looked ahead to a series of US labor reports due this week to gauge the Fed’s next move, with the release of Friday’s key payrolls report in doubt amid a budget impasse in Congress.

“If the shutdown delays the release, that could spark some anxiety and give extra support to safe havens like precious metals and currencies,” said Susana Cruz, a strategist at Panmure Liberum.

Vice President JD Vance said he believes the US government is on track to shut down after President Donald Trump’s last-ditch meeting with top congressional leaders ahead of the Oct. 1 deadline ended without resolving Democrats’ demands.

Many federal operations will pause and nonessential employees will be furloughed or fired if lawmakers can’t reach an agreement by the time the current fiscal year comes to an end.

Per the latest guidelines, the Bureau of Labor Statistics — responsible for a number of gold-standard US economic releases — would cease operations and likely delay Friday’s payroll report in the event of a shutdown.

“Given the importance of the job market to the Fed’s rate-cutting decisions, risk that the September unemployment report could be delayed could add to the market’s anxiety over the direction of policy,” said Kathy Jones, chief fixed income strategist at Charles Schwab & Co.

What Bloomberg strategists say…

To some extent gold’s gains slid under the radar because record highs for the precious metal are so common now as to be completely passe. But Monday’s 2% surge from already elevated levels does speak to a degree of angst about the risk for the shutdown to deliver a fresh bout of turmoil. That also boosts the potential for gold to drop sharply should America avoid a shutdown.

—Garfield Reynolds, MLIV Team Leader. For full analysis, click here.

Meanwhile, China’s factory activity extended its decline into a sixth month, the longest slump since 2019, as the economy descended into a slowdown after a growth spurt to start the year. Chinese equities are set for their best run of monthly gains in seven years.

Corporate News:

China’s state-run iron ore buyer has told major steelmakers and traders to temporarily halt purchases of all new BHP Group cargoes, widening an earlier curb as contract talks have stalled, according to people familiar with the matter. Electronic Arts Inc. agreed to sell itself in the largest leveraged buyout on record to a group of investors that includes a firm managed by Trump’s son-in-law Jared Kushner and Saudi Arabia’s sovereign wealth fund. Alphabet Inc.’s Google agreed to pay $24.5 million to resolve Trump’s claims that being banished from his YouTube channel after the Jan. 6, 2021, riot at the US Capitol was illegal censorship, according to a court filing. Boeing Co. is planning a new single-aisle airplane that would succeed the 737 MAX, the Wall Street Journal reported, citing people familiar with the matter. Jefferies Financial Group Inc. posted its best fiscal third-quarter revenue ever, buoyed by what the firm said is a strengthening environment for dealmaking and trading activity across the globe. Some of the main moves in markets:

Stocks

The Stoxx Europe 600 fell 0.3% as of 9:39 a.m. London time S&P 500 futures fell 0.2% Nasdaq 100 futures fell 0.2% Futures on the Dow Jones Industrial Average fell 0.2% The MSCI Asia Pacific Index rose 0.5% The MSCI Emerging Markets Index rose 0.4% Currencies

The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.2% to $1.1752 The Japanese yen rose 0.4% to 147.93 per dollar The offshore yuan was little changed at 7.1272 per dollar The British pound rose 0.1% to $1.3445 Cryptocurrencies

Bitcoin fell 0.7% to $113,509.03 Ether fell 1.3% to $4,171.83 Bonds

The yield on 10-year Treasuries was little changed at 4.13% Germany’s 10-year yield was little changed at 2.71% Britain’s 10-year yield was little changed at 4.70% Commodities

Brent crude fell 1.2% to $67.14 a barrel Spot gold fell 0.6% to $3,809.25 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Anand Krishnamoorthy.

©2025 Bloomberg L.P.