SINGAPORE – Gold surged beyond the $3,900-per-ounce mark for the first time on Monday, buoyed by safe-haven demand amid a sliding yen, political turmoil in Japan, and the ongoing U.S. government shutdown. Hopes of further Federal Reserve rate cuts also strengthened the rally.
By 0208 GMT, spot gold was up 0.9% at $3,922.28 per ounce, after touching an all-time high of $3,924.39 earlier in the session. U.S. gold futures for December delivery climbed 1% to $3,947.30. “Yen weakness on the back of the Japanese LDP elections has left investors with one less safe-haven asset to go to, and gold was able to capitalise,” said Tim Waterer, Chief Market Analyst at KCM Trade.
Waterer added that the U.S. government shutdown continues to weigh on market sentiment, clouding growth prospects and prompting investors to seek stability in gold — traditionally viewed as a crisis hedge.
The yen plunged against the U.S. dollar by its sharpest margin in five months after fiscal dove Sanae Takaichi was elected to lead Japan’s ruling party, positioning her to become the next prime minister.
Meanwhile, uncertainty in the United States deepened after a White House official warned of mass layoffs of federal workers if negotiations to end the partial shutdown stall.
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At the Federal Reserve, Governor Stephen Miran reiterated his call for an aggressive rate cut trajectory, citing the impact of Trump administration policies on the broader economy.
Gold has now soared 49% in 2025, following a 27% rise in 2024, driven by central bank buying, robust ETF inflows, a weaker dollar, and heightened retail demand amid geopolitical and trade tensions.
The rally gained further momentum after the Fed’s quarter-point rate cut last month, with officials signalling a steady easing path for the remainder of the year.
According to the CME FedWatch Tool, investors are pricing in additional 25-basis-point cuts in both October (95% probability) and December (83% probability). “Gold thrives in a low interest rate environment and during economic uncertainties,” analysts said, noting the metal’s consistent outperformance since March, when it first broke the $3,000-per-ounce barrier.
Spot silver climbed 0.8% to $48.33 per ounce, platinum rose 1.1% to $1,621.90, and palladium advanced 0.8% to $1,270.25.