Gold Hits Highest Peak in 14 Years Supported by Interest Rate Cut Expectations and U.S. Shutdown Fears

Gold rose in global markets on Tuesday, reaching a new record level, on its way to registering the strongest monthly performance in over a decade, supported by escalating fears of a potential U.S. government shutdown alongside market expectations of the Federal Reserve moving towards cutting interest rates.

In today's trading, gold rose in spot transactions by 0.7% to reach $3863.90 per ounce, while U.S. gold futures for December delivery increased by 0.9% to $3893.50. This rise has enabled the precious metal to achieve a monthly gain of 11.4% so far in September, marking the strongest monthly increase in over 14 years.

This record performance comes amid an atmosphere of political and financial uncertainty, as negotiations between U.S. President Donald Trump and the Democrats are stalled in avoiding a government shutdown that could disrupt many services.

Additionally, recent economic data has bolstered expectations that the U.S. Federal Reserve will move forward with cutting interest rates this year, as the "FedWatch" tool from the CME Group indicates that traders are giving nearly a 89% chance for a new cut of 25 basis points at the next Federal Reserve meeting.

It is worth mentioning that gold is considered a safe haven for value during times of political and financial turmoil, and it typically thrives in a low-interest-rate environment, which explains the strong interest from investors at this time.

In a related context, other precious metals showed mixed performance, with silver stabilizing at $46.95 per ounce, while platinum saw a slight decline of 0.2% to $1597.58, and palladium dropped by 0.8% to $1259.02.