Gold Soars Above $3900 an Ounce for the First Time Amid Stalled U.S. Budget Negotiations
Gold recorded a historic rise today, Monday, surpassing the $3900 an ounce mark for the first time, as investors continue to flock to safe havens amid the ongoing halt of U.S. government activities and rising expectations of interest rate cuts.
Gold rose in spot trading by 1.3% to reach $3938.91 an ounce, while U.S. gold futures for December delivery jumped by the same percentage to $3961.90.
This historic jump was the result of several pressures in the market, as fears of worsening the government shutdown crisis grow after a senior White House official warned that President Donald Trump's administration "will resort to mass layoffs of federal employees if the president sees that negotiations with congressional Democrats to end the partial government shutdown (will not lead to a result)."
On the monetary side, investors are turning their attention to the Federal Reserve after council member Stephen Miran confirmed on Friday the "necessity of adopting a more aggressive path in cutting interest rates," expressing concern about the impact of Trump's administration policies on the economy. Market expectations via the "Fed Watch" tool show a 95% probability of a rate cut in October, and 83% in December.
This record level crowns an exceptional rise for the precious metal, which has increased by 49% since the beginning of 2025, after gains of 27% in 2024, supported by central bank purchases, increased demand for exchange-traded funds, a declining dollar, and rising hedging demand from individual investors.
In the global demand scene, India— the second-largest consumer of gold— recorded an increase in demand last week despite the record prices due to the festive season, while activity in the Chinese market was halted due to the official holiday.
Regarding the performance of other precious metals, silver stabilized at $47.98 an ounce, while platinum rose by 0.5% to $1613.15, and palladium increased by 0.2% to $1263 an ounce.
