U.S. Government Shutdown Fuels Fiscal Fears — Gold and Bitcoin Hit New Highs

Market Overview

The ongoing U.S. government shutdown has amplified concerns about the countrys long-term fiscal health and strengthened expectations for a weaker dollar. Against this macro backdrop, investors are flocking to traditional “stores of value” such as gold and Bitcoin, pushing both assets to repeated record highs.

Recent market data show that gold has broken above the critical $3,900 per ounce level, while Bitcoin has surpassed $125,000. Meanwhile, the U.S. dollar index has fallen roughly 10% year-to-date, underscoring clear capital outflow trends.

Most analysts agree this surge is not merely a short-term event. With persistent inflation and mounting fiscal deficits as structural drivers, the long-gold and long-Bitcoin, short-dollar trade setup remains fundamentally solid—suggesting further upside potential ahead.

Hot Topics Preview

● Yen Plunges, Japanese Stocks Surge

Japans financial markets are swiftly pricing in a potential return of “Abenomics”. The Nikkei 225 jumped more than 4%, while the yen tumbled 1.5% against the dollar, nearing the ¥150 mark. Japanese government bonds also came under pressure, with the 40-year yield spiking 14 basis points to 3.52%. As a protégé of the late Prime Minister Shinzo Abe, Sanae Takaichi advocates aggressive fiscal expansion and may pressure the Bank of Japan to maintain an ultra-loose monetary stance.

● GOP “Showdown” Over Shutdown

House Republicans have decided not to return to Washington this week, using the move to pressure the Senate into accepting their temporary funding bill—raising the likelihood of an extended shutdown. This also means Septembers CPI data could face delays, following the earlier postponement of nonfarm payroll reports.

The last major shutdown in 2013 lasted 16 days, delaying multiple economic data releases over the following months. Economists at the University of Michigan note that such disruptions come at a sensitive time, as key indicators are now more valuable amid shifting economic conditions.

Key Focus

22:00 — U.S. Global Supply Chain Pressure Index (September)