Gold price near the $3,900 mark – Commerzbank
The Gold price has continued to climb with the start of the US government shutdown yesterday, reaching a new record high, Commerzbank's Head of FX and Commodity Research Thu Lan Nguyen notes.
Gold hits record on U.S. shutdown fears
"Although this is not the first shutdown in history (the last one was seven years ago), some investors still seem to be nervous. This is likely due to threats by US President Trump, who has suggested using the shutdown as an opportunity to enact mass layoffs of federal employees. Such a move would exacerbate the already deteriorating labor market situation."
"However, if Trump refrains from such actions, the impacts are expected to be limited. After all, it is likely that expenditures and wage payments will simply be delayed, with the negative economic effects being offset at a later date."
"Additionally, this time the discussions revolve 'only' around passing a regular budget, rather than also raising the debt ceiling, as was the case in past shutdowns. Consequently, debt servicing is not affected, and there is no risk of a default on US Treasury bonds."
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FXStreet Insights Team
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