Gold prices soared beyond the $3,900-per-ounce threshold for the first time on Monday, setting another record high as investors flocked to the safe-haven asset amid the ongoing U.S. government shutdown, growing expectations for lower interest rates, and persistent global economic uncertainty.
By 08:11 ET (12:11 GMT), spot gold had jumped 1.3% to $3,939.00 per ounce, after briefly touching a new all-time high of $3,949.34 earlier in the session. Gold futures also advanced 1.4% to $3,962.95.
The continued partial shutdown of the U.S. government has delayed key releases of economic data, including the widely watched nonfarm payrolls report. The absence of official figures has pushed traders to rely more heavily on private-sector indicators in recent days.
According to analysts at Vital Knowledge, alternative data tracking private employment and business activity have revealed “darkening storm clouds” and mounting inflationary pressures.
The Federal Reserve’s next interest rate decision, due in October, now looms larger given the lack of economic clarity. Despite the data blackout, CME’s FedWatch Tool shows markets overwhelmingly expect the central bank to continue easing borrowing costs at its next meeting.
“Markets expect a quarter-point rate cut this month, which could further support gold,” analysts at ING said in a note. The metal, which offers no yield, generally benefits in low-interest-rate environments.
Meanwhile, the political standoff in Washington continues, as Republicans and Democrats remain divided over healthcare guarantees. A senior White House official warned Sunday that mass layoffs of federal workers could begin if President Donald Trump concludes that negotiations with congressional Democrats are “absolutely going nowhere.”
So far this year, gold has rallied nearly 50%, supported by its safe-haven appeal, strong central bank purchases, and rising inflows into gold-backed exchange-traded funds (ETFs). Additional buying from retail investors and a weaker U.S. dollar have provided further momentum to the precious metal’s historic climb.
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