Positioning for a government shutdown: gold, Nasdaq 100, EURUSD

Unless Congress can reach an agreement before 1 October, the federal government will shut down. The last major shutdown, during President Trump’s first term, lasted 34 days.

Markets are already weighing the risks of plummeting confidence in the US and its currency and disruptions to the release of important economic data. For traders, this can create volatility and opportunity across major asset classes.

Gold

Gold often benefits from political and fiscal uncertainty. If a shutdown occurs, safe-haven flows could push the metal higher.

Nasdaq 100

The Nasdaq 100 has been sensitive to swings in sentiment around government stability and interest rate expectations. A shutdown could amplify volatility. Traders should be mindful of potential gap moves at the weekly open if negotiations falter over the weekend.

EUR/USD

A shutdown that undermines confidence in U.S. fiscal management could weigh on the EUR/USD in the short term. However, Europe faces its own economic issues, potentially keeping the pair range-bound for now.