The international price of gold has soared to an unprecedented high, surpassing 3,800 USD per ounce. This surge is attributed to heightened safe-haven demand, fueled by concerns over a potential U.S. government shutdown and a weakening dollar.
On Monday, spot gold prices in both London and New York markets breached the 3,800 USD per ounce mark. Gold has seen a staggering 45% increase this year alone, maintaining its bullish momentum. Market analysts cite growing anxieties over U.S. government debt, inflation, and uncertainties surrounding the dollar’s status as the world’s reserve currency as primary catalysts for this upward trajectory.
The recent rally’s main driver has been a significant influx of Western investors into gold exchange-traded funds (ETFs). Deutsche Bank analysts observed, “We are witnessing a rare convergence of two powerful buying forces in the market: central banks and ETF investors.”
The World Gold Council (WGC) reported that gold ETFs have experienced four consecutive weeks of capital inflows, approaching levels last seen during the pandemic. September alone saw an influx of approximately 100 tons, marking the most rapid monthly pace since April 2020.
The possibility of a U.S. government shutdown is also bolstering gold prices. With federal funding set to expire in three days, Trump has entered negotiations with Congress. However, the prospects of reaching a short-term budget agreement remain uncertain. As political instability intensifies, gold’s appeal as a hedge against dollar fluctuations continues to grow.
pride@fnnews.com Lee Byeong-cheol, Foreign Correspondent
