HSBC-Precious Metals Daily Gold surged on US government shutdown fears...-20250929

Market focus, emerging trends

Gold prices jumped in Asian trading. A powerful combination of a weaker USD andnews of potential government shut down in the US pushed prices aboveUSD3,800/oz. After pressing higher in Asian hours, gold traded sideways, holdinggains in the London session. Indications on the spot market implied that centralbanks were still active in the gold market although some were sellers. Silver tradedconvincingly higher also. Gold continues to exert a gravitational pull on silver, butgains are supported by good underlying industrial demand. Both platinum andpalladium saw physical buying, but there was more investor interest in platinum.

Gold rallied further in US trading. A weaker USD and lower rates allowed for goldgains. The threat of a government shutdown was taken more seriously by investors,and uncertainty in this regard was the key driver of gold. Notably lower oil prices hadno apparent impact on bullion. President Trump is scheduled to meet with leaders ofboth parties on the issue, but it was unclear if a plan to avert a shutdown wasimminent. Rather, President Trump and Israeli Prime Minister Netanyahu held anews conference with details of a US peace plan for Gaza. Investors may have takenthis as evidence that progress to avert a shutdown may not be immediatelyforthcoming. Silver and platinum shot higher also, although palladium fell. In additionto the positive influence of higher gold, both metals continued to see tightness, likelyrelated to fresh tariff concerns. A lack of fresh physical buying undercut palladium.