Gold (GC=F) prices ticked higher on Wednesday, with haven assets looking more attractive as the US government entered its first lockdown in seven years
The precious metal was trading at all-time highs on the continued political uncertainty.
On Tuesday, Senate votes failed to advance either a Republican bill (even as three members of the Democratic caucus crossed party lines to vote ‘yes’) or a Democratic plan. No compromise plan was offered, ensuring the funding lapse.
Non-essential government departments will cease to function and officials will be put on unpaid leave while the shutdown commences.
The shutdown — the first since a seven-week stoppage during Trump’s first term — began at 12:01am ET as the new fiscal year began. That last shutdown took place in 2018 and broke the record for the longest in American history.
Economic effects might be noticeable quickly as government spending largely ceases and economic data gets delayed, starting this Friday with what was scheduled to be a jobs report from the Bureau of Labor Statistics. These impacts could be mitigated if the stoppage ends promptly.
Gold (GC=F) futures jumped 1.1% in early trade in London following a day of profit taking. Over the past five sessions the yellow metal has rallied nearly 5%, and is changing hands at $3,916.50 per troy ounce.
Spot gold prices also advanced 1.1% to the $3,886 mark.
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