Gold prices are on a remarkable run, notching their seventh consecutive week of gains as of October 4, 2025, driven by mounting economic uncertainty in the United States and a swirl of regulatory changes in the Thai financial markets. The convergence of a prolonged U.S. government shutdown, shifting expectations for Federal Reserve interest rates, and heightened scrutiny of short selling in Thailand has created a complex landscape for investors worldwide.
According to a report by Reuters, spot gold prices rose by 0.7% to $3,884.19 per ounce at 13:40 Eastern Time (17:49 GMT), hovering just below an all-time high of $3,896.49 set the day before. U.S. gold futures for December delivery closed up more than 1%, settling at $3,908.90 per ounce. This surge marks a more than 3% increase in the past week alone, underscoring gold’s reputation as a safe haven asset in times of turmoil.
The backdrop to this rally is the ongoing U.S. government shutdown, now entering its third day, which has rattled markets and left investors searching for stability. With no clear resolution in sight, both Democratic and Republican Senate plans to reopen the government remain in limbo. The resulting uncertainty has only added fuel to gold’s ascent. As Jim Wyckoff, a senior analyst at Kitco Metals, told Reuters, "The longer the government remains shut down, the more it supports the gold market. If there’s a surprise deal over the weekend to reopen the government, that could be a negative factor."
Adding to the uncertainty, a key U.S. nonfarm payrolls report—typically a major indicator for investors—was postponed due to the shutdown. Without this data, market participants have been forced to rely on alternative signals, many of which point to a cooling labor market and reinforce expectations that the Federal Reserve will soon cut interest rates. According to CME Group’s FedWatch tool, investors are now pricing in a 97% chance of a 0.25% rate cut in October and an 85% chance of another cut in December.
Gold’s performance has been nothing short of spectacular this year, rising over 47% so far in 2025. UBS, in a recent note, projected that gold could climb to $4,200 per ounce in the coming months, citing the decreasing opportunity cost of holding gold as U.S. real interest rates fall and the U.S. dollar weakens. "The opportunity cost of holding gold is declining as U.S. real interest rates fall, while the forecast for a weaker U.S. dollar further supports gold prices," the bank noted.
Other precious metals have also seen gains, albeit more modest. Spot silver surged 2.1% to $47.96 per ounce, platinum jumped 2.4% to $1,606.29 per ounce, and palladium increased 1.5% to $1,259.41 per ounce. The upward trend across the board highlights a broader search for safe assets amid global market jitters.
Meanwhile, on the other side of the globe, the Thai financial markets are grappling with their own set of challenges. As reported by Bangkok Biz News, concerns over the impact of short selling on stock market volatility have prompted Thailand’s Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) to tighten regulations. The agencies have been working together to close loopholes and enhance transparency, aiming to bolster investor confidence in the Thai capital market.
Short selling, the practice of borrowing shares to sell them with the intention of buying them back at a lower price, has long been a double-edged sword. While it can increase market liquidity and provide a tool for hedging risk, it can also exacerbate price declines and fuel volatility—especially in less liquid markets. The debate has intensified in Thailand as trading volumes and stock prices have slumped compared to other regional markets, with some investors pointing fingers at short selling as a key culprit.
In response, the SEC and SET have enacted a series of measures. These include restricting short selling to only the most liquid stocks—those in the SET100 Index and certain derivatives-linked securities—implementing the "uptick rule" (requiring short sales to be executed at a price higher than the last trade), and amending laws to crack down on naked short selling (selling shares without first ensuring they can be borrowed). These steps, introduced in April 2025, were designed to reduce volatility in mid- and small-cap stocks and to ensure that short selling activities remain fair and transparent.
"The SEC and SET have continuously improved short selling oversight to ensure transparency, fairness, and auditability, thereby strengthening confidence in the Thai capital market," the agencies stated in a joint announcement. The measures have already led to a significant reduction in short selling activity, though some market participants warn that liquidity has also suffered as a result.
Further refinements are underway. Following consultations with brokerage firms and industry groups, the regulators are considering additional safeguards, such as clarifying rules around the "locate" requirement (ensuring shares can be borrowed before a short sale), enhancing documentation standards, and refining how suspicious trades are investigated. The aim is to strike a balance between preventing market abuse and maintaining sufficient liquidity for healthy trading.
Not everyone is convinced that tighter rules are the answer. Some investors and industry observers argue that short selling, when properly regulated, plays a vital role in efficient price discovery and risk management. Others remain wary, citing past episodes where aggressive short selling coincided with sharp market downturns. The SEC, for its part, maintains that its approach is informed by international best practices, drawing on experiences from markets in Singapore, Japan, and Malaysia.
As the global financial landscape remains unsettled, the interplay between U.S. monetary policy and local regulatory action in markets like Thailand underscores the interconnectedness of today’s economy. Gold’s meteoric rise serves as a barometer of investor anxiety, while the evolving short selling rules in Thailand reflect ongoing efforts to adapt to a rapidly changing environment.
With the U.S. government shutdown unresolved and the Federal Reserve’s next move still up in the air, all eyes are on the coming weeks. Will gold continue its record-breaking ascent? Can regulators in Thailand and elsewhere strike the right balance between curbing excess and supporting market function? For now, investors are left to navigate a world where uncertainty is the only constant, and the pursuit of safety—whether in gold or in robust regulation—remains paramount.
