Gold futures climbed to unprecedented highs on Monday, as mounting expectations for a Federal Reserve interest rate cut combined with renewed anxieties over a potential U.S. government shutdown, sending the precious metal soaring above $3,800 per ounce.
Spot gold peaked at $3,819.80 an ounce, representing about 1.5% gain, before slipping to below $3,810 as the session progressed. The rally comes as the U.S. dollar weakened, enhancing gold’s allure as a safe-haven asset.
The latest boost to gold’s momentum follows Friday’s U.S. Personal Consumption Expenditures (PCE) Price Index, which aligned with market forecasts, further cementing expectations of monetary easing from the Federal Reserve. According to the CME FedWatch Tool, traders are now pricing in a 90% likelihood of a 25 basis-point rate cut in October, and a 65% chance of a similar move in December.
President Donald Trump is slated to meet with Congressional leaders from both major parties later today, aiming to secure an agreement on government funding. Unless an accord is reached, a federal shutdown looms from Wednesday, stoking additional demand for safe-haven assets.
Gold, which traditionally performs well during periods of economic or geopolitical turbulence and amid lower interest rates, has surged more than 45% since the beginning of the year. Many brokerages have adopted a bullish stance regarding the ongoing rally, as persistent uncertainty continues to underpin upward price momentum.
