Gold prices rallied to an all-time high Monday, lifted by a weaker yen and renewed expectations of another U.S. Federal Reserve rate cut next month. Political uncertainty and an ongoing U.S. government shutdown added further support to the metal’s safe-haven appeal.
Spot gold surged as much as 1% to $3,926.63/oz, while December gold futures climbed 1.1% to $3,951.32/oz in early Asian trade. The rally underscores gold’s strength as investors sought shelter from volatility across currencies and bond markets.
The move followed weekend reports of little progress in Washington over passing a spending bill, extending the government shutdown into its second week. President Donald Trump’s deployment of the California National Guard to Portland also unsettled markets after two states filed lawsuits over the move.
Yen Slide Adds to Gold’s Momentum
A sharp selloff in the Japanese yen helped fuel the rally. The USD/JPY pair jumped 1.4% to 149.58, after Sanae Takaichi—a conservative politician seen as favoring looser fiscal policy—was elected leader of Japan’s ruling Liberal Democratic Party (LDP), positioning her to become the next prime minister.
Takaichi’s win heightened expectations that the Bank of Japan will refrain from further tightening, triggering a slide in Japanese bonds and reducing the yen’s traditional safe-haven appeal.
As investors rotated out of the yen, capital flowed into gold, driving the metal to record territory. Analysts noted that the move reflected both a currency effect and rising confidence that the Fed could pivot toward deeper easing later this year.
Broader Metals Strength on Fed Outlook
Metals markets were broadly supported by growing conviction that the Federal Reserve will deliver another 25-basis-point rate cut at its October meeting. According to CME FedWatch, traders priced in a 99% probability of such a move following last month’s cut.
- Platinum: up 1.2% to $1,627.17/oz
- Silver: up 0.6% to $48.30/oz
- Copper (LME): up 0.2% to $10,731/ton
- Copper (COMEX): down 0.3% to $5.09/lb
Despite the rally, analysts warned that prolonged government gridlock in Washington could disrupt economic activity and temper industrial demand. Still, gold’s record performance underscores persistent investor unease and confidence that lower U.S. yields will continue to favor non-yielding assets.