Gold seals record high as Trump heads for government showdown
Gold has once again smashed a record high, spurred on by tensions in the US as President Donald Trump heads for a showdown with congressional members.
The yellow metal breezed past the $3,800 mark this morning with a 1.2 per cent gain as investors flocked to the safe haven asset whilst political tensions in Washington exploded.
Today, Trump will host a bipartisan meeting at the White House with the four top congressional leaders aiming to avoid a government shutdown.
Should a deal fail to be reached, the Federal government will run out of funding leaving hundreds of thousands of workers furloughed and public services shuttered.
Republican lawmakers require seven Democratic senate votes to pass their bill to keep funding going until November 20.
Trump will meet the top Democrats in both the Senate and House of Represenatives – Hakeem Jefferies and Chuck Schumer – in a bid to reach an agreement.
Gold jumps as Trump raises the stakes
However, the White House has ramped up the stakes after the Office of Management and Budget told federal agencies to consider using a shutdown to axe federal employees as opposed to a temporary furlough.
The threats echo rhetoric from Trump’s Department of Government Efficiency (DOGE) which has called for sweeping job cuts across the government.
“The threat of a shutdown in Washington, as policymakers engage in tense negotiations ahead of a deadline at midnight on Tuesday, is yet another factor driving support for gold,” Russ Mould, investment director at AJ Bell, said.
The yellow metal also made further gains due to hopes of additional interest rate cuts from the Federal Reserve with Friday’s US jobs data expected to show subdued growth in the labour market.
“Gold prices continue to mark new records, with expectations for further rate cuts from the Fed supportive given the precious metal does not offer income.
“Now above $3,800, gold has also been boosted by central bank buying over several years, weaker demand for traditional safe havens like US government bonds driven by concerns over US deficits and trade policy, dollar weakness and geopolitical tensions, including conflicts in the Middle East and Ukraine,” Mould said.
The rally in the gold market has lifted stocks on the London market with gold miners topping the FTSE 100 in early trading.
Antofagasta led the pack up three per cent to 81.00 with Fresnillo shortly behind at a near two per cent gain to 2,366.00.