The price of Gold (XAUUSD) has surged to an all-time high in early Monday trading (October 6, 2025). The ongoing government shutdown in the United States continues to serve as a positive catalyst for Gold.
In early morning trading, Gold reached $3,920 per troy ounce, marking a new record high. This represents an increase of over $34 or 340 pips compared to Friday’s closing price.
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The shutdown in the United States is now in its sixth day, with no signs of resolution. The impasse is due to the Senate’s failure to agree on budget allocations. Senior officials in the White House have indicated that mass layoffs could occur as a result of the extended shutdown. Meanwhile, President Donald Trump has referred to this situation as “layoffs initiated by the Democrats,” as they have opposed the budget proposal put forth by the Republican party.
This situation is expected to exacerbate the labor market conditions in the United States, prompting markets to anticipate a more aggressive interest rate cut from the Federal Reserve. This scenario makes Gold increasingly attractive to investors.
Additionally, data released last Friday revealed that the purchasing managers’ index (PMI) for services from ISM was at 50 for September. This PMI figure has dropped from the previous month’s 52, teetering on the edge between contraction (below 50) and expansion (above 50).
The manufacturing sector is a cornerstone of the U.S. economy, accounting for over 70% of the gross domestic product (GDP) and nearly 80% of the labor market. The decline in the services PMI indicates worsening economic conditions in the United States.
Gold is now eyeing the psychological level of $4,000 per troy ounce should the U.S. government shutdown persist.
Prior to this year, the last shutdown took place from December 22, 2018, to January 25, 2019. During that period, Donald Trump was the 45th President of the United States, and the shutdown lasted for 35 days, the longest in U.S. history. During this time, Gold experienced significant price increases.
On another note, the USDJPY pair spiked over 2,200 points (220 pips) this morning to around 149.705. The yen has weakened following the election of Sanae Takaichi as Japan’s Prime Minister. Takaichi is the first female PM of Japan and tends to favor fiscal stimulus, resulting in a depreciated yen and the USDJPY soaring. This sharp rise in USDJPY has also impacted the euro and pound sterling, with both EURUSD and GBPUSD experiencing a gap down at the opening of trading on Monday.
