The U.S. government shutdown—now in its fifth day—has delayed key reports like Friday’s September jobs data, adding uncertainty. Markets have historically weathered short shutdowns well, but a prolonged one could weigh on sentiment if it impacts economic indicators. Investors are betting on a quick resolution, viewing it as temporary noise. Last week, stocks shrugged it off, with AI and tech momentum (e.g., Nvidia hitting $4.5 trillion market cap) driving gains. Gold continues to make new all-time highs, is gold warning us of a potential crisis ahead or simply acting as a safe haven during currency devaluation?
Gold could also be warning us of a stock market top. Gold rose from $700/oz in 2007 to $1,000 by early 2008, signalling distress before the Lehman collapse and stock market crash. This year the S&P has rallied by 36% from the April low, this is unsustainable in my view, these kind of returns are normally seen over longer period of time like years, not months. It is possible investors are selling stocks to lock in gains and buying gold to protect against a potential correction. In a major stock market decline gold tends to go down too but not as fast as stocks, it is more resilient. Sometimes gold goes up when stocks decline, if investors expect the Fed to cut rates.