Gold Hits Record as US Shutdown Weighs on Dollar: Markets Wrap

(Bloomberg) — Gold rose to a record high and Treasuries held their gains as concerns over a US government shutdown clouded the release of data seen as crucial for determining the path of Federal Reserve interest-rate cuts.

The precious metal climbed above $3,865 an ounce, lifting shares of Asian metals producers. Zijin Gold International Co., a unit of a Chinese miner, surged as much as 66% in its Hong Kong debut. Treasuries were little changed Tuesday after gaining in the prior session while a gauge of the dollar held its losses. Futures pointed to a slightly weaker open for European shares.

Gold’s 47% surge this year — it’s set for the biggest annual gain since 1979 — reflects not just worries about a US government shutdown, but also global trade tensions, doubts about US exceptionalism and Fed rate cuts. Yet, stocks have also rallied from April lows to records as tariff concerns eased and optimism over artificial intelligence outweighed growth and inflation worries.

Asian shares rose 0.4% and are poised for a sixth consecutive month of gains, the longest winning streak since 2018.

Markets are also not rushing to retrench risk after various episodes of US shutdown threats previously, Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho Securities in Singapore, wrote in a note.

“For one, experience provides some consolation of narrowly averting shutdowns or at least disaster from previous episodes,” he wrote. “Crucially, markets fully expect that dysfunctional bipartisan dynamics will necessarily accentuate political brinksmanship.”

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 ends on Tuesday.

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.

The agency’s marquee report on inflation — the consumer price index — would be the next big one on the docket, while reports on retail sales and new residential construction from the Census Bureau are also at risk of being delayed.

“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.

Elsewhere, the Aussie gained after Australia’s central bank kept its key rate unchanged in a widely anticipated decision, reiterating that it remains cautious about the outlook and that future moves will be dictated by economic data.

In geopolitical developments, Trump and Israeli Prime Minister Benjamin Netanyahu said they had agreed to a 20-point plan designed to end the war in Gaza, though the prospects for peace remained unclear without the direct involvement of Hamas.

Corporate News:

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

S&P 500 futures were little changed as of 6:50 a.m. London time Nasdaq 100 futures were little changed The MSCI Asia Pacific Index rose 0.4% Japan’s Topix rose 0.5% Australia’s S&P/ASX 200 fell 0.2% Hong Kong’s Hang Seng rose 0.2% The Shanghai Composite rose 0.5% Euro Stoxx 50 futures fell 0.1% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1734 The Japanese yen rose 0.2% to 148.26 per dollar The offshore yuan was little changed at 7.1312 per dollar The British pound was little changed at $1.3438 Cryptocurrencies

Bitcoin fell 0.3% to $114,015.94 Ether fell 1.1% to $4,182.78 Bonds

The yield on 10-year Treasuries was little changed at 4.14% Japan’s 10-year yield advanced 1.5 basis points to 1.650% Australia’s 10-year yield was little changed at 4.33% Commodities

Spot gold rose 0.9% to $3,867.58 an ounce West Texas Intermediate crude fell 0.4% to $63.18 a barrel This story was produced with the assistance of Bloomberg Automation.

–With assistance from Masaki Kondo and Alice French.

©2025 Bloomberg L.P.