Gold prices surged to a new record high on Tuesday, the dollar slipped, and global stock markets traded mixed as investors braced for a potential U.S. government shutdown that threatens to delay the release of key economic data.
Talks between Congressional leaders and President Donald Trump on Monday failed to produce a breakthrough ahead of the Tuesday midnight deadline. Senate Democratic leader Chuck Schumer said “large differences” remained, while Vice President JD Vance accused Democrats of holding the country “hostage” with their funding demands, warning that “we’re headed to a shutdown.”
Analysts noted that while shutdowns are often short and largely ignored by markets, this round could prove more damaging. Neil Wilson of Saxo Markets cautioned that “deep political divisions could see this drag on. A longer shutdown could have serious consequences for stocks. In the 35-day shutdown of 2018–2019, the S&P 500 fell 14%.”
Gold — a traditional safe-haven asset — climbed above $3,871 an ounce, up nearly 50% since the start of the year, with speculation mounting it could soon breach the $4,000 mark. “Gold is no longer just a hedge; it’s the star performer, the heavyweight everyone is watching,” said Stephen Innes of SPI Asset Management.
The uncertainty, coupled with expectations of further interest rate cuts, weighed on the dollar as lower rates make the currency less attractive to investors. European stocks were mixed in midday trading, while Asian markets closed on a subdued note.
A shutdown could also delay the release of crucial U.S. labour market data, including job openings, private hiring, and non-farm payrolls. Investors are closely watching for signs of continued slowdown, which could give the Federal Reserve more room to ease monetary policy further this year.
Oil prices extended Monday’s sharp losses, with Brent crude sliding 0.7% to $67.53 per barrel and West Texas Intermediate down 0.8% at $62.95, pressured by oversupply concerns and speculation of an OPEC+ output hike.
Market snapshot (1045 GMT):
- London – FTSE 100: Flat at 9,302.25 points
- Paris – CAC 40: Down 0.4% at 7,853.55
- Frankfurt – DAX: Up 0.1% at 23,771.00
- Tokyo – Nikkei 225: Down 0.3% at 44,932.63 (close)
- Hong Kong – Hang Seng: Up 0.9% at 26,855.56 (close)
- Shanghai – Composite: Up 0.5% at 3,882.78 (close)
- New York – Dow: Up 0.2% at 46,316.07 (close)
- Euro/dollar: $1.1742, up from $1.1725
- Pound/dollar: $1.3439, up from $1.3434
- Dollar/yen: 147.99, down from 148.68
