Gold Nears Record High Amid U.S. Government Shutdown Fears and Rate Cut Expectations
Gold Nears Record High Amid U.S. Government Shutdown Fears and Rate Cut Expectations
As of September 30, 2025, gold prices have surged, approaching record highs due to escalating concerns over a potential U.S. government shutdown and soft labor market data, which have heightened expectations for Federal Reserve interest rate cuts. Spot gold increased by 0.3% to $3,843.43 per ounce, rebounding from earlier losses, and had reached a record high of $3,871.45 during Asian trading. U.S. gold futures for December delivery rose 0.5% to $3,873.20. reuters.com
Market sentiment was influenced by weaker U.S. hiring trends and rising odds—now at 97%—that the Fed will cut rates in October. Gold, a non-yielding asset, tends to perform well during times of uncertainty and low interest rates. Bullion prices have jumped 11.5% in September, setting up for the largest monthly gain since August 2011, and are up 16.4% for the quarter. With U.S. lawmakers unlikely to agree on a funding bill before the deadline, economists suggest a prolonged shutdown could hurt economic performance and support more monetary easing, further benefiting gold. reuters.com
Meanwhile, silver fell 1.1% to $46.42 but remains up 17% for the month, while platinum and palladium also dropped. reuters.com
In India, the world's second-largest gold consumer, imports of gold and silver nearly doubled in September compared to August, despite record-high prices. This surge was driven by banks and jewellers stocking up ahead of the festive season and in anticipation of an increase in the base import price used to calculate import duties. The rush in imports may widen India's trade deficit and put pressure on the rupee. reuters.com
In summary, gold's recent performance underscores its role as a safe-haven asset amid economic uncertainty and potential monetary easing. Investors should monitor upcoming economic data and geopolitical developments to inform their precious metals investment strategies.
