Gold surged above $3,800 an ounce for a new record on Monday, as investors flocked to the safe-haven metal amid fears of a potential US government shutdown.
Spot gold rose as much 1.7% to $3,831.27 an ounce, surpassing its previous all-time high by about $50 an ounce. US gold futures were also 1.2% higher, peaking at $3,860.60 per ounce in New York.
Gold’s rise was fueled by a continued deterioration of the US dollar, which lost 0.3% as the market awaits developments from a meeting between top US congressional leaders and President Donald Trump on Monday, scheduled right before the Sept. 30 expiration of federal funding.
Political uncertainty
“Safe-haven demand focused on the potential US government shutdown” is one of the driving factors behind this rally, said David Meger, director of metals trading at High Ridge Futures. “The dollar is under some light pressure in response to that, certainly supporting the precious metals complex.”
A government shutdown, analysts say, would also threaten the release of key data including Friday’s payrolls report and add further uncertainty to the path of the Federal Reserve’s monetary policy. Weaker employment figures could bolster the case for additional easing in October — a scenario that would benefit bullion.
Traders also continued to weigh threats to the US central bank’s independence, after Fed Governor Lisa Cook’s attorneys on Thursday urged the Supreme Court to let her stay on the job while she fights Trump’s attempt to fire her.
“Bullion doesn’t look overpriced relative to the dollar and Treasuries, which ought to contain a level of Fed-related premium, given the nature of the risk from the central bank’s potential loss of independence,” Barclays strategists said in a note on Sunday.
“This makes it a surprisingly good value hedge,” they added.
45% gain
Gold has soared 45% this year, setting successive peaks on robust central-bank demand and expectations of lower US interest rates. Prices are on track to close out a third consecutive quarterly gain next week, with holdings in bullion-backed ETFs at the highest since 2022.
Banks including Goldman Sachs Group and Deutsche Bank have said they expect the rally to extend, with the former predicting prices to hit $5,000 should Trump’s attacks on the Fed continue. Those at JPMorgan even see bullion reaching $6,000 by the end of Trump’s presidential term.
Peers also surging
Meanwhile, gold’s precious metal peers have seen unprecedented tightness this year, exacerbating concerns about dwindling stockpiles of freely available metal in London as several years of supply deficits come to a head.
Lease rates — which reflect the cost of borrowing metal, generally for a short period of time — for silver, platinum and palladium have all surged well above their normal levels of close to zero, according to Bloomberg data.
Silver, most notably, has risen by nearly 60% this year, trading at levels not seen since early 2011. The metal is now above $47 per ounce, closing in on its all-time high from the late 1970s.
Fresh concerns that platinum-group metals may be swept up in Trump’s Section 232 investigation into critical minerals have exacerbated market tightness, according to Citigroup analysts. The bank sees higher odds of palladium being subject to potential US import tariffs, pending the review that’s expected to land in October.
(With files from Bloomberg and Reuters)
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Gold surged above $3,800 an ounce for a new record on Monday, as investors flocked to the safe-haven metal amid fears of a potential US government shutdown.
Spot gold rose as much 1.7% to $3,831.27 an ounce, surpassing its previous all-time high by about $50 an ounce. US gold futures were also 1.2% higher, peaking at $3,860.60 per ounce in New York.
Gold’s rise was fueled by a continued deterioration of the US dollar, which lost 0.3% as the market awaits developments from a meeting between top US congressional leaders and President Donald Trump on Monday, scheduled right before the Sept. 30 expiration of federal funding.
Political uncertainty
“Safe-haven demand focused on the potential US government shutdown” is one of the driving factors behind this rally, said David Meger, director of metals trading at High Ridge Futures. “The dollar is under some light pressure in response to that, certainly supporting the precious metals complex.”
A government shutdown, analysts say, would also threaten the release of key data including Friday’s payrolls report and add further uncertainty to the path of the Federal Reserve’s monetary policy. Weaker employment figures could bolster the case for additional easing in October — a scenario that would benefit bullion.
Traders also continued to weigh threats to the US central bank’s independence, after Fed Governor Lisa Cook’s attorneys on Thursday urged the Supreme Court to let her stay on the job while she fights Trump’s attempt to fire her.
“Bullion doesn’t look overpriced relative to the dollar and Treasuries, which ought to contain a level of Fed-related premium, given the nature of the risk from the central bank’s potential loss of independence,” Barclays strategists said in a note on Sunday.
“This makes it a surprisingly good value hedge,” they added.
45% gain
Gold has soared 45% this year, setting successive peaks on robust central-bank demand and expectations of lower US interest rates. Prices are on track to close out a third consecutive quarterly gain next week, with holdings in bullion-backed ETFs at the highest since 2022.
Banks including Goldman Sachs Group and Deutsche Bank have said they expect the rally to extend, with the former predicting prices to hit $5,000 should Trump’s attacks on the Fed continue. Those at JPMorgan even see bullion reaching $6,000 by the end of Trump’s presidential term.
Peers also surging
Meanwhile, gold’s precious metal peers have seen unprecedented tightness this year, exacerbating concerns about dwindling stockpiles of freely available metal in London as several years of supply deficits come to a head.
Lease rates — which reflect the cost of borrowing metal, generally for a short period of time — for silver, platinum and palladium have all surged well above their normal levels of close to zero, according to Bloomberg data.
Silver, most notably, has risen by nearly 60% this year, trading at levels not seen since early 2011. The metal is now above $47 per ounce, closing in on its all-time high from the late 1970s.
Fresh concerns that platinum-group metals may be swept up in Trump’s Section 232 investigation into critical minerals have exacerbated market tightness, according to Citigroup analysts. The bank sees higher odds of palladium being subject to potential US import tariffs, pending the review that’s expected to land in October.
(With files from Bloomberg and Reuters)
Sponsored: Secure your wealth today — buy gold bullion directly through our trusted partner, Sprott Money.