Gold has cemented its status as a capital appreciation safe haven, especially as the global investors flock to the precious metal amid the US Government’s first shutdown in nearly seven years. Gold’s prices have risen to an all-time high of $3,910 per ounce on Friday, even as rumours about further US Federal Reserve’s rate cuts do the rounds.
Following the the US Federal Reserve’s 25 basis points rate cut on September 25, cryptocurrency exchanges saw almost $1.65 billion worth of redemptions, lowering the overall market cap for cryptocurrencies by almost 4%.
Recently, spot gold rates increased to $3,884.19 per ounce, after a record high of $3.896.49 per ounce. This week, prices have risen almost 3% as institutional investors, hedge funds and even central banks continue to buy gold after growing concerns of a prolonged US government shutdown.
“I think the longer the government stays shut down, that’s going to be a steady bullish element for the gold market. If they happen to have a surprise weekend agreement to open the government back up, that would probably be a bearish element,” Jim Wyckoff, senior analyst at Kitco Metals, explained.
This latest rally has seen the prices rise for almost seven weeks now, a rare feat for a defensive asset class. Analysts attribute this to Donald Trump’s arbitrary policies and the resultant market turbulence, which can worsen if the shutdown persists.
In India, domestic prices have mirrored the international rally, with prices touching Rs.1,20,770 for 10 grams, with an almost 10% rise since September 1.
Despite that, gold’s demand remains resilient, with jewellers preparing for the festive demand surge.
