Positioning for a U.S. Government Shutdown: Gold, Nasdaq 100, EUR/USD

The clock is ticking as Congress races to avert a government shutdown on October 1. The last major shutdown during President Trump’s first term lasted 34 days, and markets are now bracing for renewed fiscal turmoil. A lapse in funding could undermine global confidence in the U.S. dollar, disrupt the release of key economic data, and trigger volatility across multiple asset classes.

Gold: Safe-Haven Demand in Focus

Gold typically shines during periods of political and fiscal instability. If a shutdown materializes, safe-haven inflows could lift XAU/USD beyond recent highs, particularly if the dollar weakens and Treasury yields decline. Traders will watch whether gold can maintain support near $3,660 as uncertainty builds.

Nasdaq 100: Volatility Risk Ahead

The Nasdaq 100 remains highly sensitive to shifts in sentiment around government stability and interest rate expectations. A shutdown could amplify volatility, especially during thin weekend liquidity. Traders should monitor for potential gap openings at the weekly open if negotiations collapse.

EUR/USD: Balancing Weakness on Both Sides

A U.S. fiscal standoff may initially weigh on the dollar, but Europe’s fragile growth outlook could limit the euro’s upside. As a result, EUR/USD may remain range-bound near current levels until clearer resolution emerges. Short-term moves are likely driven more by risk sentiment than by fundamentals.

Bottom Line

A prolonged shutdown could dent confidence in U.S. governance and delay economic releases crucial to the Fed’s decision-making, injecting fresh uncertainty into FX and equity markets. Traders should prepare for heightened two-way volatility across risk-sensitive assets.