Global financial markets were jolted on Wednesday, October 1, as gold prices surged to an all-time high of $3,875.53 per ounce, driven by investor flight to safety following the shutdown of the United States government. The shutdown, which began after lawmakers failed to pass a funding deal before the end of the fiscal year on September 30, triggered a wave of uncertainty across Wall Street and currency markets, while Asian and European bourses showed mixed reactions.
The impasse stems from a breakdown in negotiations between Democrats and Republicans over a temporary spending measure. Senate Republicans attempted to fast-track a House-passed bill but failed to secure the Democratic votes needed to send it to President Donald Trump for approval.
At the heart of the deadlock is a dispute over healthcare funding, with Democrats demanding the restoration of hundreds of billions of dollars earmarked for low-income households—funds the Trump administration seeks to cut.
The shutdown has led to the suspension of non-essential federal operations, leaving hundreds of thousands of civil servants without pay and raising fears of disruptions to social safety net payments. Speaking at a White House event, President Trump said, “So we’d be laying off a lot of people that are going to be very affected. And they’re Democrats, they’re going to be Democrats. We’ll use the pause to get rid of a lot of things we didn’t want, and they’d be Democrat things.”
Republican House Speaker Mike Johnson placed blame squarely on the opposition, posting on X: “Democrats have officially voted to CLOSE the government.” In response, Democratic leaders Chuck Schumer and Hakeem Jeffries issued a joint statement declaring their readiness to “find a bipartisan path forward to reopen the government in a way that lowers costs and addresses the Republican healthcare crisis.”
The shutdown has heightened investor anxiety over delays in key economic data releases, including Friday’s non-farm payrolls report, a critical input for the Federal Reserve’s interest rate decisions. Futures contracts for all three major New York indexes fell, with the Dow retreating from its recent record high.
Asian markets largely shrugged off the turmoil, with gains recorded in Singapore, Seoul, Wellington, Taipei, Manila, Mumbai, Bangkok and Jakarta. London also traded higher, while Tokyo, Paris and Frankfurt slipped. Sydney ended flat, and Hong Kong and Shanghai remained closed for holidays.
Currency markets reflected the uncertainty, with the dollar weakening against major peers. The euro rose to $1.1768, the yen strengthened to 147.21 per dollar, and the pound dipped to $1.3468. India’s rupee edged up slightly after the central bank held interest rates steady, though it remained near record lows amid trade tensions with Washington.
In commodities, US benchmark WTI crude rose 0.4 percent to $62.59 per barrel, while Brent crude matched the gain to reach $66.28. Meanwhile, Australian mining giant BHP saw its shares slide 2.5 percent following reports that Chinese steelmakers were instructed to halt purchases of dollar-denominated seaborne cargoes from the company due to a pricing dispute.
