TLDR
- Gold climbed to an all-time high of $3,900 per ounce on Wednesday during the first US government shutdown since 2018
- Precious metals are up 48% year-to-date, tracking toward the strongest annual performance in 46 years
- Federal Reserve rate cuts and central bank purchasing have fueled the rally in bullion prices
- Silver prices jumped to $47.56 per ounce, gaining more than 60% in 2025
- The government closure threatens delays to critical economic reports including Friday’s jobs data
Gold prices surged to a record high on Wednesday as the United States entered a government shutdown. The precious metal touched $3,900 per ounce during its fifth straight session of gains.
Congress failed to pass emergency funding legislation, forcing federal agencies to close. The White House ordered departments to begin shutdown procedures for the first time in seven years. This marks a return to federal closures not seen since 2018.
The shutdown creates uncertainty around key economic data releases. The Bureau of Labor Statistics may delay Friday’s non-farm payroll report. These employment figures are critical for investors tracking the health of the US economy.
Bullion has rallied more than 48% since January. This performance puts gold on pace for its best year since 1979. The metal has outpaced major stock market indexes throughout 2025.
Central Bank Demand Supports Rally
Global central banks have maintained steady gold purchases this year. Institutional investors have also increased positions in gold-backed exchange-traded funds. The Federal Reserve’s decision to cut interest rates has made non-yielding assets like gold more attractive.
Gold ETFs recorded their largest monthly inflows in September since 2022. Bloomberg data shows investors poured billions into funds tracking physical gold prices. The SPDR Gold Shares ETF has delivered higher returns than the S&P 500 over the past three years.
US gold reserves now carry a $1 trillion valuation. This figure reflects both accumulated holdings and rising market prices. Foreign governments continue diversifying reserves away from dollar-denominated assets.
Federal Reserve Officials Split on Rate Path
Federal Reserve policymakers expressed different views on interest rates this week. Boston Fed President Susan Collins suggested additional cuts may be warranted. She pointed to softening labor market conditions as justification for easier monetary policy.
Dallas Fed President Lorie Logan advocated for a more cautious approach. She argued inflation remains above the central bank’s 2% target. Logan said the labor market shows relative strength despite recent cooling.
Investor concerns about monetary policy independence have also supported gold. Fed Governor Lisa Cook is fighting a legal battle to remain in her position. President Donald Trump has attempted to remove her from the board.
Silver Joins Precious Metals Rally
Silver prices climbed 2% to reach $47.56 per ounce on Wednesday. The industrial and precious metal now trades within 5% of its all-time peak. Silver has gained more than 60% this year.
Supply constraints have tightened the silver market. Years of production deficits are creating shortages for industrial users. Manufacturing demand for silver remains strong from solar panel and electronics producers.
The Bloomberg Dollar Spot Index declined 0.2% as the shutdown began. A weaker dollar typically supports commodity prices denominated in the currency. Spot gold traded at $3,888.35 per ounce in London trading, while platinum advanced and palladium held steady.
