Gold on bull run as investors seek safe haven

Spot gold climbed above $3 970 an ounce on Tuesday as investors sought safety amid escalating political uncertainty in France, the ongoing US government shutdown, and growing expectations of further Federal Reserve rate cuts, according to Trading Economics.

The metal’s rally accelerated after the partial suspension of US federal operations — now in its second week — left investors without key economic data to assess the health of the economy and guide monetary policy expectations.

Gold has surged roughly 50% so far this year, putting it on track for its strongest annual performance since 1979.

"Gold has benefited from multiple catalysts this year, including tariff uncertainty, stubborn inflation, and a falling US dollar," said analyst Bret Kenwell at eToro, AFP reported

"Uncertainty around the government shutdown and prospects of lower interest rates have only seemed to fan the flames of this year’s rally," he added.

The US government shutdown stretched into a seventh day, with Republicans and Democrats appearing no closer to an agreement.

Bets on the Federal Reserve cutting interest rates this month and the political crisis in France are adding to the allure of gold, a safe-haven asset.

Kathleen Brooks, research director at trading group XTB, said the rally on the precious metal is part of the "debasement" trade, AFP reported

"This trading theme is driving demand for alternative assets such as gold and crypto, as the dollar faces a long-term decline and fiscal concerns continue to rise around the world," she added.

BUSINESS REPORT