Key Highlights-
- Fifth Senate vote fails to end US government shutdown
- Gold prices soar near $4,000 as investors seek safety
- Political unrest in France and Japan adds to global uncertainty
The US government shutdown has entered its second week, with the Senate failing yet again on Monday to pass crucial funding measures. This fifth unsuccessful attempt has rattled global markets and driven gold to record highs.
According to Reuters, both Democrat- and Republican-backed bills collapsed in back-to-back votes, each falling short of the 60-vote threshold needed to reopen federal agencies. Thousands of government workers remain furloughed or are working without pay after funding expired five days ago.
Trump Blames Democrats, Warns of Layoffs
President Donald Trump renewed threats of mass layoffs earlier in the day, warning that “permanent firings” of federal employees were imminent if lawmakers failed to act. Following the Senate’s rejection of both proposals, Trump took to Truth Social, blaming Democrats for the continued deadlock.
“I am happy to work with the Democrats on their Failed Healthcare Policies, or anything else, but first they must allow our Government to reopen,” he posted.
As reported by BBC News, Democrats have refused to back the Republican-led bill, demanding that any new funding legislation also address healthcare, specifically to protect subsidies for low-income Americans and reverse cuts to Medicaid. Republicans, on the other hand, are pushing for a “clean” funding bill, insisting healthcare issues can be tackled later.
Press Secretary Karoline Leavitt said Monday that the Office of Management and Budget was already coordinating with agencies to prepare for layoffs. “We don’t want to see people laid off,” she said, “but if this shutdown continues, that will be an unfortunate consequence.”
Senate Leaders Trade Blame
Tensions between party leaders continue to escalate. Senate Democratic leader Chuck Schumer dismissed Trump’s claims of ongoing healthcare negotiations as “not true,” while House Speaker Mike Johnson accused Democrats of “playing politics” in an interview with NBC’s Meet the Press.
THIS ISN’T TRUE.
For months, Democrats have been demanding Trump and Republicans come to the table and work with us to deliver lower costs and better healthcare for the American people.
If Republicans are finally ready to sit down and get something done on health care for… https://t.co/dvm4kGVJwq
— Chuck Schumer (@SenSchumer) October 6, 2025
Democratic House leader Hakeem Jeffries countered that Republicans were “lying about Democrats’ intentions because they’re losing the court of public opinion.”
A recent CBS News poll found that most Americans disapprove of both parties’ handling of the crisis, though Trump and congressional Republicans shoulder slightly more blame.
Gold Surges Toward $4,000 on Global Instability
As Washington grapples with its longest shutdown in recent years, gold prices surged to an all-time high of $3,977.44 an ounce, inching closer to the symbolic $4,000 mark. Analysts say the prolonged suspension of federal operations has also disrupted the release of key economic data. This amplifies investor anxiety and triggers a rush toward safe-haven assets.
“The combination of the US shutdown and fresh political turmoil in Europe and Asia has fueled gold’s latest rally,” said Nicky Shiels, head of metals strategy at MKS PAMP SA, in a note cited by Bloomberg.
In France, Prime Minister Sébastien Lecornu’s resignation after failed budget negotiations has deepened the political crisis facing President Emmanuel Macron. Meanwhile, in Japan, Nikkei Asia reported that Sanae Takaichi’s likely appointment as the next prime minister has unsettled markets, adding to global uncertainty.
Markets React to Political Upheaval
Central banks and exchange-traded funds have been major buyers of gold this year, as Trump’s trade policies and global unrest pushed investors away from the dollar. Spot gold rose 0.1% to $3,964.02 an ounce as of early Tuesday in Singapore trading, while the Bloomberg Dollar Spot Index remained steady.
According to CNBC, traders are still pricing in a quarter-point interest rate cut by the Federal Reserve later this month. A move that could further boost bullion, which doesn’t yield interest.
The shutdown’s economic impact is expected to grow if the impasse continues, with markets already showing strain. For now, the political gridlock in Washington, paired with Europe’s fiscal uncertainty, is setting the stage for gold’s biggest annual gain since 1979.
