Gold prices surged to new record highs in Asian trading on Tuesday, extending a strong rally over the past week as investors weighed the risk of an impending U.S. government shutdown.
Persistent expectations for additional Federal Reserve rate cuts also supported metals, although silver and platinum eased slightly after Monday’s sharp gains. Copper prices also retreated modestly.
Spot gold reached $3,865.73 per ounce, while futures climbed to $3,893.72 an ounce. The precious metal has surged roughly 17% in the third quarter, reflecting heightened safe-haven demand amid political and economic uncertainties.
Safe-Haven Demand Strengthens
Concerns over a government shutdown have intensified safe-haven buying. Congress must pass a spending bill by midnight on September 30 (0400 GMT Wednesday) to prevent the closure of numerous federal agencies.
A Republican-backed bill passed the House of Representatives but now faces hurdles in the Senate, where 60 votes are required for approval despite the Republicans’ 53-seat majority.
Negotiations with President Donald Trump on Monday did not break the deadlock, which revolves around healthcare and social welfare funding disagreements.
A shutdown would likely disrupt economic activity, posing potential risks to growth. Analysts warn it could also delay the release of September’s nonfarm payrolls report, scheduled for Friday. The White House has cautioned that a shutdown could put thousands of federal jobs at risk, signaling potential weakness in the labor market.
Metals Show Strong Q3 Performance
Other metals softened slightly on Tuesday but remain on track for strong third-quarter gains amid expectations for lower interest rates.
The Fed cut rates by 25 basis points earlier this month and indicated the possibility of up to two more reductions in 2025, contingent on inflation and labor market developments. Market expectations, according to CME FedWatch, still anticipate at least one additional 25 basis point cut in October.
Lower rates weighed on the U.S. dollar and supported metals prices. Spot platinum is up nearly 18% in Q3, while spot silver trades around 30% higher, both reaching multi-year highs on Monday.
Among industrial metals, London Metal Exchange copper futures steadied at $10,418.60 per ton, up 5% for the quarter. COMEX copper futures hovered near $4.90 per pound, marking an 11.4% gain for Q3.
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