The price of gold increased by over 1.4% on Wednesday, hitting a historic high of $4,040.32 as of 0835GMT, as the federal government shutdown in the US adds to uncertainty, while investors bet on more rate cuts in the Fed's next meeting.

The price of gold hovered between $2,536.91 and $4,040.32 during the last 12 months, and it gained by 54% over the same period.

The US federal government shutdown has completed its seventh day, with no resolution in sight, after Senate Democrats again blocked a Republican-led proposal to extend government funding through Nov. 21.

While a government shutdown does not automatically result in a full-blown economic crisis, it creates major disruptions for many aspects of American life, also adding to uncertainty around the state of the world's biggest economy.

Many federal employees will be furloughed, or forced to work without pay, while others will be placed on mandatory leave until a new budget is approved. Each federal agency has its own shutdown plan, determining which government employees are essential.

The shutdown also means that some key economic data will not be released in the coming days, as the Bureau of Labor Statistics’ emergency plan stated that economic data will not be published during a government shutdown, which means non-farm payrolls, initial jobless claims, and inflation figures may be delayed.

Meanwhile, aside from the concerns around the US government shutdown, gold prices continued their upward trend, led by geopolitical risk, concerns over the global economy, central banks’ gold demand, and the Fed’s rate cut cycle.

Following US President Donald Trump's insistence, the Fed cut its policy rate by 25 basis points last week.

For the Fed's October and December meetings, markets expect new rate cuts. Weak inflation figures and increasing unemployment data, as well as Trump, may push the Fed to lower rates. (Anadolu Agency)

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