Gold prices have broken the $4,000 barrier for the first time, driven by investor demand for safe‑haven assets amid expectations of U.S. interest‑rate cuts and concerns over a potential U.S. government shutdown. The rally is also fueled by worries that the tech‑driven equity market surge may be creating a bubble. Since the start of the year, gold has risen more than 50 % as global economic uncertainty, trade wars and geopolitical crises weigh on markets. Recent political turmoil in France, where the prime minister resigned, has further enhanced gold’s appeal. On Wednesday, gold climbed to a high of $4,006.68, while silver approached its own record level.
The U.S. government shutdown is adding to investor unease, prompting the postponement of key economic data such as job numbers and complicating the Federal Reserve’s interest‑rate decisions. Taylor Nugent of National Australia Bank noted that “the rapid rise in gold prices has been supported by rising inflows into exchange‑traded funds and central‑bank buying, including solid demand from China, as gold benefits from political, economic, and inflation uncertainty.”
In contrast, Asian equity markets were more subdued, with doubts raised about massive investments in artificial intelligence. A report showing Oracle’s lower‑than‑expected cloud‑computing profit margin triggered declines across all three major Wall Street indexes. Stephen Innes of SPI Asset Management observed, “In a market priced for perfection, any delay in cash flow — even a temporary one — feels like the bartender calling ‘last call.’” Tech firms, which have enjoyed strong buying this year, led the sell‑off in Asia, with Hong Kong and Taipei among the biggest losers. Tokyo’s market edged higher, buoyed by optimism about potential stimulus measures and monetary easing under new ruling‑party leader Sanae Takaichi.
Key market figures around 02:30 GMT showed the Tokyo Nikkei 225 flat at 47,965.29, while the Hong Kong Hang Seng Index fell 0.7 % to 26,764.89. The euro/dollar rate slipped to $1.1636 from $1.1652, and the pound/dollar fell to $1.3407 from $1.3422. West Texas Intermediate crude rose 0.7 % to $62.18 per barrel, and Brent crude increased 0.6 % to $65.87 per barrel.
The surge in gold prices and the developments in equity markets reflect shifting investor sentiment and concerns about the global economy. With the U.S. government shutdown ongoing and interest‑rate decisions on the horizon, market volatility is likely to persist, making it essential for investors to monitor developments closely and adjust their strategies accordingly.
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