The price of gold has notched another record high as a shutdown of the U.S. federal government in Washington, D.C. approaches.
The price of gold hit an all-time high of $3,849.40 U.S. on Sept. 29 and is now up 46% on the year.
Gold’s price is marching higher as congressional leaders and U.S. President Donald Trump try to avert a shutdown of the government that is scheduled to begin on Oct. 1.
Democrats are demanding an extension of health insurance subsidies for 24 million Americans enrolled in Obamacare or refusing to fund the government past Sept. 30, leading to a shutdown.
For his part, President Trump is threatening mass firings of federal workers and potentially closing some government departments permanently in the event of a shutdown.
The uncertainty is helping to drive investors into gold, which is viewed as a safe haven asset in times of geopolitical uncertainty and turmoil.
In particular, gold’s price continues to benefit from aggressive buying on the part of central banks around the world, which continue to add to their stockpiles of bullion.
At the same time, individual retail investors continue to pile into gold exchange-traded funds (ETFs) such as the SPDR Gold Trust (GLD) that holds physical gold and tracks the spot price of the precious metal.
In a note to clients, Deutsche Bank (DB) highlights that over the past four weeks, a record $17.6 billion U.S. has flowed into gold ETFs.
Deutsche Bank has a $4,000 U.S. price target on gold currently.
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