Global markets steadied Tuesday as investors sought safe-haven assets amid growing uncertainty from a US government shutdown and political upheaval in France. Gold hovered near a fresh record high, reflecting rising demand for stability.
French shares edged higher after President Emmanuel Macron called on outgoing Prime Minister Sébastien Lecornu to salvage his administration. Lecornu resigned Monday after less than a month in office and was tasked with gaining cross-party support to end France’s political deadlock. Analysts say the move highlights ongoing political upheaval affecting investor confidence.
In London and Frankfurt, markets also rose in midday trading. Meanwhile, gold hit $3,977.44 an ounce before slightly paring gains. Investors remained cautious due to the US government shutdown, as Republicans and Democrats appeared no closer to a resolution. Anticipation of a Federal Reserve rate cut, combined with France’s political turmoil, further boosted gold’s safe-haven appeal.
Kathleen Brooks, research director at XTB, called the gold rally part of the “debasement trade,” noting that fiscal concerns and a weakening dollar are driving demand for alternative assets.
In Asia, Tokyo hit another record after the election of pro-stimulus leader Sanae Takaichi to head Japan’s ruling party. Her expected economic measures boosted optimism for Japanese markets. The Nikkei 225 surged nearly five percent Monday, while yields on 30-year Japanese bonds rose due to debt concerns.
Tech stocks globally gained momentum as well, fueled by AI-related partnerships. Advanced Micro Devices and OpenAI announced a collaboration to develop AI data centres, pushing the S&P 500 and Nasdaq to record closes in New York. Analysts expect AI investment to remain strong but do not see an emerging bubble.
In Pakistan, gold prices continued rising in line with international trends. The price of 24-karat gold rose by Rs1,500 per tola, reaching a record Rs416,778, while 10-gramme gold climbed to Rs357,319. Experts anticipate further gains as global uncertainty, political upheaval, and currency fluctuations continue to support demand for precious metals.
The combined impact of US fiscal uncertainty, French political instability, and global economic risks has made investors cautious, keeping markets volatile while driving interest in gold as a secure asset.
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