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Good morning, and welcome to our ongoing updates of the economy, the trading floors and the international finance.

Gold Tops Unprecedented $4,000 Mark

The price of gold has surged past $4,000 an ounce for the first time, continuing a climb fuelled by worries over political drama in the Japanese market, the French economy and the US, where the federal shutdown has continued.

Spot gold increased by 1.15% to $4,029.46 an ounce, a further all-time peak, and is up fifty percent so far this year. This follows rises of 27% last year and thirteen percent the year before.

The precious metal is regarded as a secure investment in times of turmoil, and also used as a hedge against growing cost pressures.

Investor Outlook and Expert Opinions

Financial billionaire an influential investor equated the current period to the 1970s era when soaring inflation and high government debt levels and outlays eroded faith in other assets.

It resembles the early ’70s ... how do you allocate your money?

Gold provides excellent diversification in the portfolio. If you consider it just from a strategic asset allocation viewpoint, you would perhaps have something like 15% of your portfolio in gold … because it is an investment that does very well when the typical parts of the investment fall.

Investors’ appetite for gold-related assets seems strong. Traders have been investing heavily in gold exchange-traded funds with inflows reaching $64bn so far this year, based on data from the World Gold Council, with a unprecedented $17.3bn in the previous month. National banks have also been buying gold.

Factors Fueling the Surge in Gold

Expectations of further US interest rate cuts, worries over international tensions, import duties and an tech bubble, along with a declining US currency have propelled the gold rally.

An market analyst, market expert at a banking group, said:

Gold has staged a historic rally, doubling in under 24 months, driven by monetary authority purchases as it moves from the American currency, the administration’s aggressive trade policy and tensions in the Middle East and Eastern Europe.

In the future, central banks are continuing to purchase – the Chinese central bank maintained its gold buying streak in the previous month for an eleventh month in a row even with historic levels – tariff disputes is ongoing, international tensions are high, and ETF holdings continue to expand while predictions of further easing intensify. All of this implies that gold has additional upside.

Vertu Motors Alerts of Profit Impact

The car sales firm Vertu Motors has reported a £5.5m hit to its yearly earnings from major issues to its luxury carmaker showrooms after the car company paused production for five weeks following a crippling cyber attack.

Its top executive the CEO said it was an unfortunate situation to experience significant issues across the JLR network” during the previous month, a crucial time for car sales as number plates are refreshed.

Even though the circumstances are changing, it appears to be easing in recent days.

Vertu, which is headquartered in Gateshead, reported record half-year sales of over two and a half billion pounds for the six months to the end of August, higher than £2.47bn a year earlier. Adjusted pre-tax profit fell by ten percent to £20m.

Further Economic Developments

• Mining shares are now leading gains on the FTSE 100 index, on the due to the ongoing gold climb.
• Car finance scandal: financial institution equities climb on relief over regulatory news.
• Crude costs rise 1% as glut concerns lessen after Opec+ limits production growth.
• Germany’s manufacturing output falls significantly, raising recession risk.

The Agenda

• Conservative party conference
• Afternoon session: IMF managing director Kristalina Georgieva speech
• Late afternoon: Huw Pill presents in the UK city
• 19:00 UK time: US Federal Reserve minutes of last month’s gathering