Gold Surges Past $3,865 as Shutdown Fears, Trade Tensions Fuel Haven Demand – Asia Market Wrap

Gold rose to a record high and Treasuries held their gains as concerns over a US government shutdown clouded the release of data seen as crucial for determining the path of Federal Reserve interest-rate cuts.

The precious metal climbed above $3,865 an ounce, lifting shares of Asian metals producers. Zijin Gold International Co., a unit of a Chinese miner, surged as much as 66% in its Hong Kong debut. Treasuries were little changed Tuesday after gaining in the prior session while a gauge of the dollar held its losses. Futures pointed to a weaker open for European shares.

Gold’s 47% surge this year – it’s set for the biggest annual gain since 1979 – reflects not just worries about a US government shutdown, but also global trade tensions, doubts about US exceptionalism and Fed rate cuts. Yet, stocks have also rallied from April lows to records as tariff concerns eased and optimism over artificial intelligence outweighed growth and inflation worries.

Asian shares rose 0.3% and are poised for a sixth consecutive month of gains. the longest winning streak since 2018.

Vice President JD Vance said he believes the US government is on track to shut down after President Donald Trump’s last-ditch meeting with top congressional leaders ahead of the Oct. 1 deadline ended without resolving Democrats’ demands.

Meanwhile, China’s factory activity extended its decline into a sixth month, the longest slump since 2019, as the economy descended into a slowdown after a growth spurt to start the year. Chinese equities are set for their best run of monthly gains in seven years.

Elsewhere, the Aussie gained after Australia’s central bank kept its key rate unchanged in a widely anticipated decision, reiterating that it remains cautious about the outlook and that future moves will be dictated by economic data.