Gold Breaks $3,800 Amid Rate-Cut Speculation and U.S. Shutdown Fears

Gold soared past $3,800 an ounce on Monday, reaching a new record as investors sought safety amid growing uncertainty over U.S. interest rate cuts, a potential federal government shutdown, and rising geopolitical tensions.

Spot gold was trading at $3,829.63 per ounce by 2:00 p.m. ET (1800 GMT), after briefly hitting $3,833.37 earlier in the session. U.S. December gold futures settled 1.2% higher at $3,855.20. Meanwhile, the U.S. dollar index slipped 0.2%, making gold more attractive to international buyers.

Safe-Haven Demand Drives Rally

David Meger, director of metals trading at High Ridge Futures, attributed the rally to heightened safe-haven demand:

“Investors are closely watching the potential U.S. government shutdown. The dollar is under some light pressure, which certainly supports the precious metals complex.”

President Donald Trump is meeting congressional leaders to negotiate an extension of government funding. Without an agreement, a federal shutdown could begin on Wednesday, amplifying market uncertainty.

Geopolitical Tensions Add Fuel

Tensions overseas also played a role. Russia’s defense ministry reported control over the village of Shandryholove in Ukraine’s Donetsk region, reinforcing the perception of global instability, which historically boosts gold’s appeal.

Rate-Cut Bets Support Gold

Gold thrives in low-interest-rate environments, and market optimism about U.S. Federal Reserve cuts is pushing prices higher. The Personal Consumption Expenditures (PCE) Price Index last week came in line with expectations, bolstering bets on further rate reductions in October and December.

“The PCE data from last week was viewed as not standing in the way of an additional one or two Fed rate cuts,” Meger noted. “They continue to support gold and silver.”

Other Precious Metals on the Move

Gold wasn’t the only beneficiary this week:

Silver climbed 1.9% to $46.85, reaching a 14-year high.

Platinum gained 1.5% to $1,592.65, marking a 12-year high.

Palladium slipped 1.1% to $1,255.61, showing some weakness amid the rally.

Corporate Changes in the Gold Sector

Major gold miners also made headlines. Newmont CEO Tom Palmer announced plans to retire by year-end after over a decade at the helm, while Barrick CEO Mark Bristow also stepped down, signaling a leadership shakeup in the industry.

Year-to-Date Gains Highlight Strength

Gold’s rally this year has been extraordinary, climbing over 43%, supported by a combination of macroeconomic uncertainty, geopolitical risk, and continued speculation of Fed rate cuts. Analysts expect that the metal’s safe-haven appeal will remain strong in the near term as these factors persist.