New Delhi: Gold prices soared to a new record high on Monday, driven by safe-haven demand amid concerns over a partial shutdown of the US government and growing bets that the Federal Reserve will deliver more interest rate cuts this year. Spot gold rose 0.9% to $3,922.28 per ounce by 0208 GMT, after hitting an all-time high of $3,924.39 earlier in the session. US gold futures for December delivery also climbed 1% to $3,947.30.
The rally came as investors rushed to the yellow metal following renewed uncertainty in the US, where a government shutdown has halted several non-essential services and heightened fears of economic disruption. Analysts said the political deadlock and rising fiscal pressures have reinforced expectations that the Fed may ease its monetary policy sooner than previously projected. According to the CME FedWatch tool, traders are now pricing in a high probability of a 25-basis-point rate cut in October and another in December.
A weaker dollar and a softer Japanese yen also boosted bullion’s appeal. The yen slipped after the election of Japan’s new prime minister, Sanae Takaichi, who is seen as favouring fiscal stimulus measures, prompting investors to shift more capital into gold. “With political uncertainty in the US and a dovish turn expected from the Fed, the environment remains highly supportive for gold,” the report quoted analysts as saying.
The surge in prices also reflects steady central bank purchases and continued inflows into gold-backed exchange-traded funds. Investors have been seeking safety amid ongoing geopolitical tensions, volatile energy prices, and concerns about slowing global growth. So far in 2025, gold has gained nearly 49%, following a 27% rise in 2024, making it one of the best-performing major assets globally.
Other precious metals traded higher as well. Silver rose 0.8% to $48.33 per ounce, platinum gained 1.1% to $1,621.90, and palladium advanced 0.8% to $1,270.25.
Analysts said the metal’s momentum could continue if the Fed signals a deeper easing cycle or if the US fiscal situation worsens. “Investors are positioning for prolonged policy uncertainty and persistent inflation risks,” the report noted, adding that the latest surge highlights gold’s role as the preferred hedge against financial instability.
