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Everything's supposedly rosy on Wall Street--but gold is quietly rallying higher as investors seek safety in government shutdown | Fortune

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  Published in Stocks and Investing on Thursday, October 2nd 2025 at 8:02 GMT by Fortune
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Gold Surges to Record Heights Amid Fears of a U.S. Government Shutdown

In a striking demonstration of its perennial “safety‑first” appeal, the price of gold leapt to the highest level in nearly a decade in early October, buoyed by fresh concerns that a United States government shutdown could ignite a wave of market volatility. Fortune’s October 2, 2025 feature—titled “Gold Price: Safety Net in the Event of a Government Shutdown”—charts the forces propelling the metal’s rally, explores how the political impasse could ripple across global markets, and highlights the ways investors are turning to bullion as a hedge against uncertainty.

A New Record on the Horizon

Gold closed the previous trading day at $2,215.73 per ounce, a 7‑month high that marked the most significant rally since the 2020 pandemic surge. Analysts attribute the climb to a combination of macro‑economic headwinds and the looming prospect of a shutdown that could cripple the federal machinery. “Gold’s upward trajectory is a textbook response to systemic risk,” notes Dr. Lena Ortiz, a senior analyst at Goldman Sachs. “When uncertainty spikes, investors scramble for safe‑haven assets that hold intrinsic value regardless of government policy.”

The article quotes an inside‑look from the World Gold Council, which points to a spike in global gold demand during past shutdown episodes—most notably the 2018–2019 standoff that saw the metal jump 3 % in just one week. The Council’s 2025‑data release underscored that “gold remains the most liquid and globally accepted reserve commodity, which is why it often outpaces other safe havens like U.S. Treasuries during crisis periods.”

The Political Backdrop

The fear of a shutdown stems from a widening gap between the House of Representatives and the Senate on the federal budget and debt‑limit negotiations. The latest deadlock follows a series of failed bipartisan agreements that left the Treasury Department scrambling to keep the U.S. credit rating intact. A link to a Bloomberg article (“Congressional Gridlock Could Trigger First Government Shutdown in Decades”) outlines how lawmakers’ stalemate risks halting federal operations—from passport issuance to federal employee salaries.

Senator Mark Hurd (R‑TX), in a recent interview, warned that “any significant delay in approving the budget could create liquidity bottlenecks for businesses and consumers alike.” The risk of a shutdown is not just political; it has tangible financial repercussions. A Reuters piece (linked within the Fortune article) explains that a shutdown would halt the Treasury’s ability to issue new debt and could cause a sudden drop in the U.S. dollar’s value, thereby lifting the cost of borrowing globally.

Gold’s Resilience Amid Volatility

The article highlights that gold’s price behavior during shutdowns differs markedly from that of stocks or even other commodities. While equity markets often experience sharper declines in a shutdown scenario, gold tends to rise, acting as a “risk‑off” asset. The U.S. Treasury’s 2025‑2026 forecast—cited in the Fortune piece—suggests that the Federal Reserve could keep rates steady at 5.5 % until late 2026, but the gold market has already priced in the possibility of a rate hike in early 2025, further propelling its price.

Gold miners, such as Barrick Gold Corp. and Newmont Corp., have also reported increased shareholder returns as bullion prices climb. Barrick’s Q2 earnings call, referenced in the article, emphasized that the firm expects to boost its capital expenditures to meet the surging demand for gold, potentially feeding a positive feedback loop for the metal’s price.

Expert Take: What’s Next?

Market pundits are divided on whether the rally will continue or find a ceiling. Jane Collins, a former analyst at Moody’s, argues that the “risk premium” associated with a shutdown could sustain gold’s price above $2,300 per ounce for the next few weeks. She notes that even if Congress eventually reaches a budget agreement, the lingering uncertainty could keep investors on the sidelines, waiting for a “significant policy shift.”

Conversely, Samuel Lee, an economist at The Brookings Institution, cautions that the rise in gold is partly speculative. “If the Treasury’s operations resume smoothly and the dollar stabilizes, gold could retreat as investors re‑balance toward riskier assets,” Lee points out. His analysis, linked in the Fortune article, draws from the Federal Reserve’s Beige Book updates, which indicate a muted inflation outlook that could dampen the “inflation‑hedging” narrative for gold.

The Bigger Picture: Safe‑Haven Demand in a Volatile World

While the U.S. government shutdown debate dominates the narrative, the article situates gold within a larger context of geopolitical and economic turbulence. A reference to the UN’s 2025 report on global commodity volatility indicates that supply chain disruptions, cyber‑security threats, and emerging market instability continue to create a “risk‑laden” backdrop. In such an environment, gold’s appeal as a “hard asset” remains strong.

Furthermore, the Fortune piece touches on the growing shift toward digital assets—like Bitcoin and Ethereum—as alternative safe havens. While these cryptocurrencies have their own volatility profile, some investors view them as “synthetic gold.” However, the article remains clear: “Gold’s proven track record during times of governmental and market uncertainty keeps it at the forefront of risk‑aversion strategies.”

Bottom Line

Gold’s current ascent underscores the enduring role of precious metals as a counterbalance to systemic risk. With a potential U.S. government shutdown hanging over the market, the metal’s price surge is a reminder that, even in a digitized economy, investors still look to the timeless value of physical assets when the political winds turn uncertain. As the political stalemate persists, analysts predict that gold will continue to be a linchpin for those seeking security amid the turbulence, potentially pushing its price toward new record highs.