Gold price jumped above $3,890 per ounce on Wednesday, setting a fresh record as investors rushed to buy the precious metal for safety.
The move came after the U.S. government shut down, suspending many operations because politicians in Congress and the White House failed to agree on a budget. The standoff has left thousands of federal workers uncertain about their jobs and pay.
Investors fear the shutdown could last for weeks and delay important economic data, such as the monthly U.S. jobs report, which the Federal Reserve watches closely before making decisions on interest rates.
Gold is often called a “safe-haven” asset because people trust it to hold value when the economy or politics look shaky. Even though it doesn’t pay interest, many prefer it during times of crisis.
On October 1, gold traded at $3,889.05 per ounce, up 0.78% from the previous day. Over the past month, prices have risen by more than 10%, and compared to last year, gold is up nearly 46%, according to market data.
Traders now expect the Federal Reserve to cut interest rates later this month, with another possible cut in December, as the U.S. economy shows signs of slowing.
