Gold surged to a record high on Tuesday as the political deadlock in the United States Congress showed no signs of ending, leaving the government partially shut down. Growing expectations of an imminent U.S. interest rate cut also strengthened investor appetite for the precious metal.
Spot gold climbed 0.4% to $3,974.09 per ounce by 04:46 GMT, trading close to its all-time peak of $3,977.19 reached earlier in the day. U.S. gold futures for December delivery increased 0.5% to $3,996.40.
Market Uncertainty and Rate Cut Hopes
«The likelihood of rate cuts in October and December remains above 80%, which is supporting gold prices,» said Kelvin Wong, senior market analyst at OANDA. «The ongoing government shutdown is also contributing to investor caution.»
Although Kansas City Federal Reserve President Jeff Schmid warned against lowering rates too quickly due to inflation risks, markets remain confident of two additional 25-basis-point cuts this year. The CME FedWatch tool places the probability of cuts at 93% in October and 82% in December.
Gold typically benefits from lower interest rates and periods of economic uncertainty. The metal has risen 51% since the start of 2025, supported by strong central bank purchases, robust demand for gold-backed exchange-traded funds, a weaker dollar, and rising interest from retail investors seeking protection amid global trade and geopolitical tensions.
Central Bank Buying Boosts Confidence
Goldman Sachs has raised its December 2026 forecast for gold to $4,900 per ounce from $4,300, citing continued Western ETF inflows and sustained central bank buying. The People’s Bank of China also increased its gold reserves in September for the eleventh consecutive month, according to official data.
In other precious metals, spot silver was unchanged at $48.52 per ounce, platinum edged up 0.1% to $1,626.55, and palladium gained 0.9% to $1,330.91.
Kursiv also reports that global central banks added a total of 15 tons of gold to their reserves in August, according to the latest report from the World Gold Council.
