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Gold surges past USD 4000 as market nerves rise

Gold soared to an all-time high above USD 4000 per ounce on Wednesday as concerns over the US government shutdown and broader economic and geopolitical uncertainty intensified the flight to safety. US equity markets retreated from record highs amid profit-taking in technology stocks and ongoing jitters around tariffs and political risks, while Asian shares were also weaker with tech sectors under pressure. Meanwhile, the Reserve Bank of New Zealand delivered a surprise 50-basis-point rate cut to support its faltering economy, accentuating the shift in global monetary policy. European equity markets were little changed.

  • Date
  • Author Shane Strowmatt, Senior Investment Writer
  • Reading time 5 minutes

Gold
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Gold continued its impressive rally, trading around USD 4030 per ounce on Wednesday, driven by mounting concerns over the US economy and the ongoing government shutdown. The metal has leapt by over 50% this year, far outpacing equity returns, as global trade uncertainties, risks to US fiscal policy, and recent moves towards monetary easing have bolstered demand. Elevated central bank purchases have underpinned the rally, while inflows into gold-backed exchange-traded funds reached a three-year high in September. Additional geopolitical tensions and fears over the Federal Reserve’s independence have contributed to the urgency of the haven rush, supporting further upside for bullion.

Asian markets lower as tech stocks retreat

Asian equities were subdued on Wednesday, with Hong Kong’s Hang Seng index falling 1% amid significant declines in technology shares such as Baidu, Alibaba, and JD.com following renewed doubts over artificial intelligence and weak performance from Oracle in the US. Japan's Nikkei 225 was trading 0.3% lower, coming down from recent record highs after optimism surrounding new fiscal stimulus started to wane and questions arose regarding funding for proposed spending increases by the country’s leadership. Australia’s S&P/ASX 200 edged down 0.1%. Broader risk sentiment was muted by global political uncertainty, including the ongoing US government shutdown and a political crisis in France, while trading volumes were restrained by holidays in mainland China and South Korea.

New Zealand cuts rates by 50 basis points

The Reserve Bank of New Zealand unexpectedly reduced its official cash rate by 50 basis points to 2.5% on Wednesday, citing persistent economic weakness and signalling that further easing is possible if inflation remains controlled. The New Zealand dollar and short-term interest rates dropped sharply after the decision, which outpaced most market forecasts that had anticipated a smaller cut. Policymakers highlighted subdued business and household confidence, weak job creation, and the negative impact of international factors including US President Donald Trump’s tariffs and tight fiscal policy.

US equities slip after record highs

Major US indices reversed early gains to close lower on Tuesday following a recent rally driven by enthusiasm for artificial intelligence. The Nasdaq 100 slipped by 0.6% to 24,840.23 points and the S&P 500 declined by 0.4% to 6714.59 points, while the Dow Jones Industrial fell by 0.2% to 46,602.98 points. The shift in sentiment was attributed to market fatigue, new US tariffs, and the ongoing government shutdown. Notably, IBM shares rose 1.5% as it announced plans to deepen its collaboration with Anthropic on AI products, while Dell advanced 3.5% after doubling revenue and profit forecasts due to strong AI-related demand, but Oracle and Nvidia both dropped after reports of lower cloud profits at Oracle.

German manufacturing orders decline in August

New orders in Germany's manufacturing sector dropped by 0.8% in August 2025 compared with July, following a larger decrease of 2.7% in the previous month, according to figures released by the Federal Statistical Office on Tuesday. Excluding large-scale orders, new orders fell more sharply, down 3.3% from July. The downturn was driven mainly by significant declines in the automotive, computer electronics, and pharmaceutical industries, while gains in fabricated metal products and other transport equipment provided some offset. European equity markets delivered little movement on Tuesday. The Euro Stoxx 50 dropped 0.3%, with Germany’s DAX and France’s CAC 40 both essentially flat, up just 0.03% and 0.04%, respectively. The Swiss Market Index slid 0.2%.

Canada trade deficit widens on falling exports

Canada’s merchandise trade deficit widened to CAD 6.32 billion in August, notably above forecasts and up from a revised CAD 3.82 billion in July, according to figures published on Tuesday. The larger deficit was primarily due to a 3% drop in exports, with shipments to both the United States and other nations declining, while imports increased by 0.9%. Exports to the United States fell 3.4% to CAD 44.18 billion, mainly impacted by lower unwrought gold sales, alongside declines in lumber and machinery. Weaker trade was linked to ongoing sectoral US tariffs and volatile supply chain shifts, with Canada’s trade deficit with countries outside the United States reaching a record high in August.

Corporate and economic calendar

Corporate news in focus: There is no major corporate news scheduled today.

Economic data in focus: German industrial production (08:00), Bundesbank monthly report (12:00), European Central Bank President Christine Lagarde speaks (18:00) and Federal Reserve monetary policy meeting minutes (21:00).

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Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.