Gold Scales New Peak On US Government Shutdown Worries

Spot gold last traded up over 2 percent at $5,097.74 an ounce after hitting a new high of $5,111.11 earlier. U.S. gold futures were up 2.3 percent at $5,133.66.

The dollar started the week on a negative note, with the yen rallying to more than a two-month high amid speculation over possible Japanese intervention to halt the currency’s recent slide – possibly with U.S. assistance.

Meanwhile, the risk of another partial U.S. government shutdown is rising after Democratic senators threatened to block a federal funding bill that includes funding for the Department of Homeland Security (DHS).

Statements and protest sentiments among lawmakers emerged following the second shooting death of a civilian by federal agents in Minneapolis.

Tariff worries also returned to the fore after U.S. President Donald Trump threatened to slap a 100 percent tariff on Canadian exports if Ottawa “makes a deal” with China.

However, Canadian Prime Minister Mark Carney clarified that his country has no intention of pursuing a free trade deal with China and that a recent deal with China merely resolved some tariff-quota issues between the two countries.

Elsewhere in Iran, authorities unveiled a new billboard in a central Tehran Square on Sunday, seemingly aimed at warning the United States against intervention.

Investors also looked ahead to a Federal Reserve interest-rate decision for direction.

The Fed is widely expected to keep interest rates on hold after a two-day policy meeting on Wednesday, despite pressure from President Trump to lower borrowing costs.

Fed officials currently remain divided over whether more rate cuts could drive up inflation.

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