Online Reporter
Gold rose to another record, extending Monday’s surge as the prospect of a looming US government shutdown clouded the Federal Reserve’s monetary policy path ahead of next month’s interest-rate decision.
Bullion gained as much as 0,9 percent to an all-time US$3 867.25 an ounce, eclipsing the peak reached in the previous session when it closed up 2 percent.
A meeting between top congressional leaders and President Donald Trump ended without a deal on the government’s short-term funding
. That fanned fears of a shutdown, which could hinder the release of economic reports, depriving investors of crucial data needed to assess the US economy.
Newmont Corp and Barrick Mining Corp, meanwhile, both announced a change to their leadership on Monday. The exit of Newmont’s Tom Palmer on December 31 was largely expected, but the departure of Barrick’s Mark Bristow came as a surprise. The companies are the world’s two largest gold producers.
Gold has soared 47 percent this year, on track for the biggest annual gain since 1979, and has set a series of records on central-bank demand and a resumption of interest-rate cuts by the Fed. Goldman Sachs Group Inc. and Deutsche Bank AG have said they expect the rally to extend.
US Treasuries also gained on Monday while the dollar declined, partly due to worries over a potential shutdown.
Lower yields on US government bonds tend to benefit precious metals, which do not pay interest, while a weaker greenback makes dollar-denominated bullion cheaper for most buyers.
“Gold hasn’t usually internalised past 11th-hour negotiations over a US government shutdown, but it also wasn’t in a berserk bull market rally during past shutdown instances,” Nicky Shiels, Geneva-based MKS PAMP SA head of metals strategy, wrote in a note.
“It’s internalising an expected subdued jobs growth in September and perhaps some US shutdown threat.” — Bloomberg
