New York Gold Futures are hovering around record high of $3900 per ounce amid rising expectations of a U.S. government shutdown and weak economic data. - Biance

New York Gold Futures are hovering around record high of $3900 per ounce amid rising expectations of a U.S. government shutdown and weak economic data. - Biance

New York gold futures have reached record highs of $3900 per ounce, driven by rising expectations of a U.S. government shutdown and concerns over weak economic data. The market's nervousness is fueled by the potential for a shutdown to delay key economic reports, including the Bureau of Labor Statistics (BLS) jobs report and the consumer price index (CPI), both of which are critical for economic policy decisions .

If Congress fails to agree on funding by the end of the fiscal year on Tuesday, many federal operations will be suspended, and non-essential employees will be furloughed. This would lead to the BLS ceasing operations and potentially delaying the release of the jobs report, scheduled for October 3, and the CPI report, which is crucial for understanding inflation trends. The Census Bureau's reports on retail sales and new home construction also face the risk of being delayed .

The Federal Reserve is closely watching these economic indicators as it considers whether to cut interest rates again at its next meeting in October. The uncertainty surrounding the shutdown and the delayed data could complicate the Fed's decision-making process. While some alternative data sources will be available, they are generally less comprehensive than government data .

The broader impact of a shutdown on the economy is uncertain, but it is expected to add to the existing uncertainty that companies and business leaders are already dealing with. According to Neil Bradley, chief policy officer at the U.S. Chamber of Commerce, a shutdown won't push the U.S. economy into a recession but will suppress growth and add to the current economic uncertainty .