Gold prices remained close to record highs in Asian trading on Tuesday, as investors sought safety in the precious metal amid mounting political instability across major economies, including the United States, Japan, and France.
Growing expectations for additional U.S. interest rate cuts also bolstered sentiment, while fresh data showing continued gold purchases by the People’s Bank of China (PBOC) provided further support. Traders are now turning their attention to comments from Federal Reserve officials later this week for signals on future monetary policy.
Spot gold gained 0.4% to $3,974.57 per ounce, after reaching a session high of $3,977.45, while December futures advanced 0.6% to $3,998.12, having briefly touched $4,000.05 earlier in the day.
Political upheaval lifts demand for gold
Uncertainty in global politics has been a key catalyst for the latest rally. In the U.S., a drawn-out government shutdown and continued congressional impasse have raised investor concerns over fiscal stability.
In France, markets were rattled by the sudden resignation of Prime Minister Sébastien Lecornu, who was quickly tasked by President Emmanuel Macron with forming a new government. The turmoil has intensified speculation over a snap parliamentary election, with both the far right and far left calling for a new mandate.
Meanwhile, in Japan, Sanae Takaichi, a noted advocate of fiscal stimulus, was elected leader of the ruling Liberal Democratic Party, setting her up to become the nation’s first female prime minister. Japanese stocks rallied on the news, but the yen weakened and bond prices slipped as investors questioned how she would finance her expansive spending and tax-cut proposals.
The wave of political uncertainty across developed markets has strengthened gold’s role as a safe-haven asset, attracting renewed demand from investors seeking stability.
Precious and industrial metals advance
Other precious metals also gained ground following recent highs. Spot platinum rose 0.5% to $1,632.51 per ounce, and spot silver edged up 0.1% to $48.56 per ounce.
In the industrial metals space, copper extended its rally. London Metal Exchange (LME) copper futures rose 0.7% to $10,724.65 per ton, while COMEX copper gained 0.8% to $5.0820 per pound. The metal found additional support after Freeport-McMoRan (NYSE:FCX) offered no timeline for restarting production at the Grasberg mine in Indonesia, one of the world’s largest copper sites, which remains shut following a fatal incident in early September.
China extends its gold-buying streak
Official data showed that the People’s Bank of China continued to boost its gold holdings in September, marking an 11th consecutive month of accumulation. The central bank’s reserves rose to 74.06 million fine troy ounces, compared with 74.02 million in August.
The value of China’s gold holdings also climbed sharply as bullion prices surged. The ongoing purchases underscore Beijing’s efforts to diversify its foreign reserves away from the U.S. dollar and Treasury assets, amid a backdrop of strained U.S.–China relations and shifting global trade dynamics.
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