A U.S. government shutdown Spurs Safe-Haven Rally took effect from midnight Tuesday (0400 GMT Wednesday) after a last-minute spending bill backed by the Republican party failed to pass the Senate, amid continued opposition from Democrats.
The political deadlock has rattled financial markets, pushing investors towards safe-haven assets. Gold surged to a series of record highs this week, as weakness in the U.S. dollar further fueled demand. Silver and platinum also benefited from the safe-haven rush, with prices reaching their highest levels in more than a decade. Spot silver rose 0.9% to $47.05/oz, marking a 14-year high, while platinum touched a 12-year peak before easing 0.3% to $1,572.18/oz.
Industrial metals also recorded strong gains earlier in the week, although some profit-taking was seen on Wednesday. Benchmark copper futures on the London Metal Exchange slipped 0.1% to $10,278.10 a ton, while COMEX copper fell 0.7% to $4.8450/lb.
Meanwhile, the shutdown is expected to delay the release of key U.S. economic data. The highly anticipated nonfarm payrolls report for September, initially scheduled for Friday, may now be postponed as federal agencies grapple with disruptions. The report is closely watched for signals on the labor market, which played a pivotal role in the Federal Reserve’s September rate cut.
Market sentiment on further rate cuts turned cautious this week, following hawkish remarks from Fed officials. Dallas Fed President Lorie Logan highlighted that the labor market would need to weaken further before the central bank considers additional cuts, reinforcing doubts over near-term monetary easing.
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