Gold Hits Record Above $3,900 as Yen Weakens and U.S. Rate Cut Bets Grow

Gold Soars to Record Above $3,900 as Yen Weakens and Rate Cut Bets Rise

Gold prices surged to a new record high in early Asian trading on Monday, boosted by a sharp decline in the yen and growing expectations of lower U.S. interest rates.

Investors continued to seek safety in bullion amid persistent concerns over the ongoing U.S. government shutdown, as lawmakers made little progress toward approving a new federal spending bill.

Additional uncertainty emerged after President Donald Trump deployed the California National Guard to Portland, Oregon, sparking backlash from state officials and lawsuits challenging the decision.

Spot gold jumped nearly 1% to a fresh record of $3,926.63 per ounce, while December gold futures climbed 1.1% to $3,951.32/oz.

💴 Yen Slump Lifts Gold After LDP Leadership Shift

The surge in gold came as foreign exchange markets saw sharp volatility, with the Japanese yen weakening significantly after Sanae Takaichi won the Liberal Democratic Party (LDP) leadership race, positioning her to become Japan’s next prime minister.

The USD/JPY pair rose 1.4% to 149.58, marking a steep fall in the yen. Takaichi, known for her dovish fiscal stance, is expected to resist further monetary tightening by the Bank of Japan (BOJ)—a move that rattled both the yen and Japanese bond markets.

As a result, the yen’s diminished safe-haven appeal drove investors toward gold, reinforcing its position as a preferred store of value during market uncertainty.

🏦 Precious and Industrial Metals Move Higher

Other precious metals also rose on Monday, extending last week’s momentum. The rally followed growing expectations that the Federal Reserve could cut interest rates again in October. The Fed had already trimmed rates by 25 basis points in September but signaled caution about future moves.

Data from CME FedWatch showed traders pricing in a 99% probability of another 25 bps rate cut this month.

Spot platinum climbed 1.2% to $1,627.17/oz, while spot silver advanced 0.6% to $48.30/oz.

However, industrial metals lagged behind: LME copper futures edged up 0.2% to $10,731 per ton, while COMEX copper slipped 0.3% to $5.09 per pound.

Meanwhile, the U.S. government shutdown continued to cloud the economic outlook. Analysts warned that prolonged delays in passing a spending bill could disrupt the labor market and weigh on short-term growth.