Gold prices reached fresh all-time highs during Asian trading on Tuesday, extending a strong rally that has persisted over the past week as investors grew increasingly concerned about a potential U.S. government shutdown.
Expectations for further interest rate cuts by the Federal Reserve also lent support to precious metals, though silver and platinum eased slightly after a strong session on Monday. Copper prices, meanwhile, pulled back modestly.
Spot gold climbed to a record $3,865.73 per ounce, while gold futures topped $3,893.72 an ounce. The yellow metal has gained roughly 17% in the third quarter, reflecting robust safe-haven demand amid multiple market pressures.
Safe-Haven Buying Rises Amid Shutdown Risk
Gold demand has been bolstered by fears that U.S. lawmakers may fail to prevent a government shutdown. Congress has until midnight on September 30 (0400 GMT Wednesday) to pass a spending bill and keep hundreds of federal operations running.
A Republican-backed bill recently cleared the House of Representatives but is encountering resistance in the Senate. Although Republicans hold a 53-seat majority, at least 60 votes are needed to approve the measure.
Efforts to resolve the impasse in a bipartisan meeting with President Donald Trump on Monday failed to produce a breakthrough. Disagreements over healthcare and social welfare funding remain at the center of the stalemate.
A government shutdown typically disrupts economic activity, posing potential risks to growth. Analysts also warn that a closure could delay the release of the closely watched nonfarm payrolls report for September, due Friday. The White House has cautioned that thousands of federal jobs could be cut if a shutdown occurs, potentially adding strain to the labor market.
Metals Strong in Q3 Amid Rate Cut Bets
Beyond gold, other metals eased slightly on Tuesday but remain on track for solid third-quarter gains, supported by optimism over lower U.S. interest rates.
The Federal Reserve cut rates by 25 basis points earlier this month and indicated the possibility of up to two more reductions in 2025, though these depend on inflation trends and labor market conditions. Fed officials offered cautious commentary over the past week, yet markets continue to expect at least one additional 25 basis point cut in October, according to CME FedWatch data.
The prospect of lower rates weighed on the dollar and provided a boost to metals, with precious metals outperforming. Spot platinum is set to gain nearly 18% in Q3, while spot silver trades 30% higher, with both metals reaching more-than-decade highs on Monday.
Industrial metals also posted strong quarterly performance. London Metal Exchange copper futures steadied at $10,418.60 per ton, up 5% in Q3, while COMEX copper hovered near $4.90 per pound, marking an 11.4% gain for the quarter.
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