Gold prices hit an all-time high in Dubai on Wednesday afternoon after the US government entered a shutdown .

The 24K variant of the precious metal rose to Dh468.25 per gram, surpassing Tuesday's all-time high of Dh466 per gram. Similarly, 22K touched Dh433.75 per gram while 21K and 18K were trading at Dh416 and Dh356.25 per gram, respectively.

Spot gold was trading at $3,884.14 per ounce.

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Daniela Sabin Hathorn, senior market analyst at Capital, said the US government shutdown has now begun.

“Historically, these episodes have had limited market impact, and that's likely to hold in the coming days, but confirmation of the stoppage adds a modest risk premium. The bigger nuance is the potential delay to Friday's nonfarm payrolls - and any subsequent official releases if the standoff drags, which deprives markets and the US Federal Reserve of timely signals just as positioning is skewed toward a dovish outcome on the back of a softening labour market,” said Daniela.

“Cross-asset, gold should remain a useful hedge against policy opacity. Its bid in a shutdown stems from three overlapping channels. First, the real-rates channel: with official data potentially blacked out, the Fed is more likely to err on the side of caution. Even if the base case for an October cut doesn't change, the perceived path of policy beyond that gets fuzzier, lowering the market's conviction in higher real yields. A lower or less certain real-yield backdrop reduces the opportunity cost of holding a non-income asset like gold,” said Hathorn.

Second, he noted that the combination of delayed macro signals and noisier politics (shutdown rhetoric, layoff headlines) lifts demand for portfolio insurance.

“Third,” he said,“the shutdowns can dent confidence in US governance at the margin; any resulting softness in the dollar mechanically boosts dollar-priced bullion. Even if the dollar chops rather than trends, the first two channels are usually enough to keep a floor under gold while visibility is poor. The main caveat is that a decisively stronger dollar and/or a backup in real yields - for example, if bond supply dynamics dominate -would blunt this tailwind. But as long as policy visibility is constrained and growth risks are skewed to the downside, gold's asymmetry remains attractive relative to risk assets,” added Daniela.

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