Investors rush to gold, pushing prices above $3,900

WEB DESK: Gold prices surged to an all-time high on Monday, breaking past the $3,900-per-ounce mark as global investors rushed towards the metal in search of safety. The rally came as political and economic uncertainty deepened, with the yen tumbling after Japan’s leadership change and the United States grappling with a prolonged government shutdown.

Spot gold rose 0.9 percent to $3,922.28 per ounce by early Asian trading hours, after briefly touching a record $3,924.39. US gold futures for December delivery also gained 1 percent, climbing to $3,947.30.

Safe-haven rush

Analysts say the weakness of the Japanese yen following the ruling Liberal Democratic Party’s election of fiscal dove Sanae Takaichi as prime minister has left investors with fewer safe-haven options. Tim Waterer, chief market analyst at KCM Trade, noted that gold has benefited directly from that vacuum.

“The enduring US government shutdown means that a cloud of uncertainty still hangs over the economy,” he said, adding that the prospect of further Federal Reserve rate cuts has only strengthened gold’s appeal.

The yen posted its sharpest drop against the dollar in five months following the leadership change in Tokyo. At the same time, the White House signalled it may resort to mass layoffs of federal workers if negotiations with Democrats fail to end the shutdown, heightening economic risks.

Fed outlook boosts rally

The Federal Reserve has already cut rates once this year and is widely expected to deliver more reductions in the coming months. Fed Governor Stephen Miran on Friday repeated calls for an aggressive easing path, arguing that the Trump administration’s policies are weighing on growth.

According to the CME FedWatch tool, markets are pricing in another quarter-point cut in October with 95 percent certainty, followed by a further cut in December with an 83 percent probability.

Non-yielding gold typically shines in low interest rate environments, making the Fed’s dovish stance a key driver of its surge.

Year of records

The precious metal has already gained 49 percent in 2025, after posting a 27 percent rise in 2024. Demand has been fuelled by central bank purchases, inflows into gold-backed exchange-traded funds, a weaker dollar and growing interest from retail buyers looking for a hedge against trade and geopolitical tensions.

Gold first broke the $3,000 threshold in March and pushed past $3,700 by mid-September. With momentum still strong, many brokerages remain bullish on its outlook.

Other precious metals also advanced on Monday, with silver climbing 0.8 percent to $48.33 an ounce, platinum rising 1.1 percent to $1,621.90 and palladium adding 0.8 percent to $1,270.25.

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