Gold prices surged to a record high in Asian trade on Monday as investors sought safe-haven assets amid growing concerns over a potential U.S. government shutdown. Expectations of lower interest rates from the Federal Reserve also added strong support for precious metals.
Spot gold reached a record $3,812.0 per ounce, while December gold futures climbed as high as $3,839.05 per ounce.
Broader metals also rallied, fueled by a weaker U.S. dollar and optimism over further Fed rate cuts. Silver and platinum both jumped to their highest levels in more than a decade.
U.S. government shutdown fears lift safe-haven demand
Gold prices benefited from increased demand as markets braced for the risk of a U.S. government shutdown this week. Funding for federal operations is set to expire at midnight on September 30, with no replacement plan yet approved.
Bipartisan negotiations remain ongoing. Republicans are pushing for a stop-gap funding bill until November, while Democrats want recent cuts to healthcare and Medicaid spending reversed before supporting new legislation. Congressional leaders from both parties are scheduled to meet President Donald Trump on Monday for further talks.
A prolonged shutdown could disrupt U.S. economic activity and delay key labor market data, including this week’s nonfarm payrolls. The last major shutdown, lasting 35 days in 2018–2019, was estimated to have reduced GDP by $11 billion, according to the Congressional Budget Office.
Silver and platinum break decade highs
Precious metals extended gains beyond gold. Spot silver surged more than 2% to a 14-year high of $47.18 per ounce, while spot platinum rallied 3.2% to a 12-year peak of $1,626.06 per ounce.
Industrial metals also benefited from stronger sentiment. Benchmark copper futures on the London Metal Exchange rose 0.6% to $10,276.45 a ton, while COMEX copper futures gained 1.3% to $4.8065 a pound.
Fed rate cut bets drive momentum
Markets continued to price in aggressive interest rate cuts from the Federal Reserve. The latest PCE inflation data, released Friday, came in line with expectations, reinforcing bets that the Fed will ease policy in the coming months.
Traders now see a 91.9% chance of a 25-basis-point cut in October and a 64.2% chance of another cut in December, according to CME FedWatch. Lower interest rates typically make gold and other non-yielding assets more attractive, adding further momentum to this rally.
