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The price of gold climbed as much as 1.5% on Monday to a new all-time high of $3,819.8 per ounce, while silver also advanced near record levels, extending the rally fueled by heightened investor demand for safe-haven assets.
Since the start of the year, gold prices have traded between $2,658.23 and $3,819.8, gaining more than 45% during the period. It marks the metal’s strongest annual performance since 1979, driven by geopolitical risks, concerns over the global economy, and accelerated global demand fueled by aggressive central bank purchases.
The metal’s latest advance followed the U.S. Federal Reserve’s decision to cut its policy rate by 25 basis points last week, under pressure from weak economic data and calls from President Donald Trump for more accommodative policy.
Markets are anticipating additional rate reductions in the coming months. According to CME’s FedWatch tool, traders are pricing in a 89.3% probability of another 25-basis-point cut in October and a 97.5% probability of a further cut in December.
Despite annual inflation remaining above the Fed’s 2% target, higher unemployment has reinforced expectations for monetary easing, while Trump’s continued criticism of the Fed has added pressure on policymakers.
Lower interest rates generally support gold prices by reducing the opportunity cost of holding non-yielding assets such as precious metals.
Investor caution was elevated by the risk of a U.S. government shutdown, with funding for federal agencies scheduled to run out at midnight on Sept. 30. Negotiations in Congress have yet to produce an agreement. Republicans are advocating for a temporary stopgap bill lasting until November, while Democrats insist on restoring healthcare and Medicaid funding before backing any new budget measures.
President Trump planned to meet leaders from both parties on Monday in an effort to break the impasse. If no deal is reached, the shutdown could disrupt economic activity, echoing the 35-day closure in late 2018 and early 2019, which the Congressional Budget Office estimated trimmed about $11 billion from output.
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The rally extended beyond gold to include other safe-haven assets. Silver surged more than 2% to $47.18 per ounce, its highest level in over 14 years, while platinum rose 3.2% to $1,626.06 per ounce, marking a 12-year high.
Both metals benefited from strong safe-haven demand and a weaker U.S. dollar, which makes dollar-denominated commodities cheaper for foreign buyers.
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