(MENAFN) Gold prices experienced a notable surge of 0.9% on Wednesday, reaching an unprecedented value of $3,895.33 by 0830GMT.

This historic peak came in the wake of a U.S. government shutdown, which resulted from stalled negotiations between President Donald Trump and congressional Democrats over federal funding.

Their failure to secure an agreement triggered the shutdown, heightening market anxiety and driving investors toward safe-haven assets like gold.

Over the past year, gold values fluctuated between $2,536.91 and $3,819.80, ultimately posting a substantial 45.9% increase.

Although a shutdown does not inherently trigger a severe financial crisis, it significantly disrupts various functions of daily life in the United States.

A considerable number of government employees will face furloughs—either being compelled to work without compensation or placed on unpaid leave until a new fiscal plan is approved.

Each federal department operates under its own shutdown procedure, which identifies which staff members are deemed essential and must remain on duty.

Another major consequence of the shutdown is the suspension of critical economic data releases.

According to the Bureau of Labor Statistics’ emergency protocol, vital indicators such as "non-farm payrolls," "initial jobless claims," and "inflation figures" will not be made public during this period.

This withholding of information adds to investor uncertainty and may influence market behavior in the near term.

In addition to the shutdown, multiple global factors continued to bolster gold’s rally.

Ongoing geopolitical instability, widespread concerns about the international economy, consistent gold purchases by central banks, and the ongoing interest rate reduction cycle by the Federal Reserve all played a role in driving the metal’s value higher.

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