US Government Shutdown Sparks Gold Rally, Dollar Weakness
The US government has entered a partial shutdown, with around 750,000 federal workers furloughed, as Congress failed to agree on a budget. This has led to uncertainty in the stock market today, with gold prices surging and the US Dollar Index weakening.
The shutdown began on October 1, as the new fiscal year started without an agreed budget. This has resulted in a delay in the release of employment data, which the Federal Reserve uses to set interest rates. The US Dollar Index (DXY) has weakened by 0.12% due to this uncertainty.
Gold prices, however, have been rising for the third consecutive session. As of 13:05 Moscow time, December gold futures were trading at $3,918 thousand per ounce, up 1.17%. Spot gold prices even set a new record, surpassing $3,890 thousand. The peak was reached at $3,922 thousand per ounce. Daniela Sabin Hathorn, a Senior Market Analyst at Capital.com, attributed this increase to the uncertainty created by the government shutdown.
The US government shutdown is not only affecting federal workers but also the stock market today. If the shutdown lasts for three weeks, it could lead to an increase in the US unemployment rate, from the current 4.3% to 4.6-4.7%. The markets are closely watching the situation, with gold prices reacting to the uncertainty.
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