Gold prices climbed above the $3,900-per-ounce mark for the first time on Monday, setting another record high as investors sought safety in the precious metal amid the ongoing U.S. government shutdown, growing bets on interest rate cuts, and broader global uncertainty.
Spot gold rose 1.3% to $3,939.00 an ounce by 08:11 ET (12:11 GMT), after briefly touching a record of $3,949.34 earlier in the day. Gold futures advanced 1.4% to $3,962.95.
The partial shutdown of the U.S. government has delayed key economic reports, including the crucial nonfarm payrolls data. In the absence of official figures, investors have turned to private data sources to gauge economic conditions.
Analysts at Vital Knowledge said that recent private employment and business activity trackers signaled “darkening storm clouds” and rising inflationary pressures.
The data void has added to uncertainty ahead of the Federal Reserve’s next interest rate decision in October. According to CME’s FedWatch Tool, markets continue to anticipate further reductions in borrowing costs despite the lack of government data.
“Markets expect a quarter-point rate cut this month, which could further support gold,” analysts at ING said in a note. The metal typically performs well in periods of lower interest rates, as its non-yielding nature becomes more attractive to investors.
Meanwhile, the political deadlock in Washington persists, with Republicans and Democrats still clashing over healthcare guarantees. On Sunday, a senior White House official cautioned that large-scale layoffs of federal employees could begin if President Donald Trump determines that negotiations with congressional Democrats are “absolutely going nowhere.”
Gold has now risen nearly 50% so far this year, supported by strong safe-haven demand, substantial central bank purchases, and increased investment in gold-backed exchange-traded funds. Additional buying from retail investors and a softer U.S. dollar have also contributed to the metal’s powerful rally.
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