(MENAFN) Gold prices surged 0.9% on Wednesday, reaching an all-time high of $3,895.33 by 08:30 GMT, following a U.S. government shutdown after funding negotiations between President Donald Trump and congressional Democrats failed to produce an agreement.

Over the past year, gold has traded between $2,536.91 and $3,819.80, representing a sharp 45.9% gain during that period, as stated by reports.

While a shutdown does not automatically trigger a full-scale economic crisis, it causes significant disruptions across many facets of American life. Large numbers of federal employees are being furloughed or required to work without pay, while others face mandatory leave until a new budget is approved. Each agency implements its own plan to determine which employees are considered essential.

The closure also delays the release of key economic indicators. Emergency procedures from labor authorities indicate that critical statistics—such as non-farm payrolls, initial jobless claims, and inflation data—will not be published during the shutdown, leaving analysts without timely figures in the coming days.

Beyond the effects of the shutdown, gold’s ongoing rally has been supported by a mix of geopolitical risks, concerns over global economic stability, strong demand from central banks, and the Federal Reserve’s interest rate reductions.

Following pressure from President Trump, the Fed cut its policy rate by 25 basis points last week, and markets are now anticipating further reductions in its October and December meetings. Soft inflation readings, rising unemployment figures, and the president’s influence were cited as key factors behind the central bank’s decision to lower rates.

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