Gold Gains as Stocks Drop

Gold powered higher this week as investors looked for safety in the middle of growing uncertainty out of the US. The ongoing government shutdown and fresh questions around American tariffs have stirred concerns about how stable the policy environment really is, and that has pushed more attention back onto precious metals. Spot gold traded just under US$4000. A softer USD also helped, making gold more attractive to buyers holding other currencies.

Bond yields eased at the same time, which matters because lower yields reduce the cost of holding gold. When income on government debt slips, investors tend to take comfort in assets that do not rely on yield to justify their place in a portfolio. In moments like these, the traditional role of gold becomes more obvious. It is about protection when policy and confidence wobble.

The shutdown risk has grown out of another political standoff in Washington. If the government runs out of funding, the flow of official data can be delayed, markets can shift nervously, and the Fed has less clarity when guiding future interest rate settings. Add legal challenges that question whether some tariffs are even lawful, and you have another layer of pressure on trade and global supply chains. These are the sorts of developments that encourage investors to hold something real, simple, and global, with very high liquidity as well.

For Australian physical gold buyers, this is an important moment to pay attention. Our own central bank is navigating a slow and uncertain path, inflation remains sticky, and growth around the world is appearing to run out of steam. Gold continues to act as a store of confidence in situations like this. It is not only about inflation. It is about preparing for disruptions that are hard to predict in advance.

Markets are also watching the chance of a rate cut in the United States later this year. If that happens, real yields will come down, which usually supports gold prices further. Safe haven demand and monetary easing are a powerful combination. At the same time, it would be no surprise to see gold consolidate for a short time, but inflationary pressure tends to not just disappear.