NEW YORK: Gold prices surged past USD3,800 an ounce for the first time on Monday, setting a new record as investors flocked to the safe-haven asset on US rate cut expectations, fears of a potential government shutdown and escalating geopolitical tensions.
Spot gold jumped 1.6 percent to USD3,820.96 per ounce by 09:32 a.m. ET (1332 GMT), after hitting a record high of USD3,831.19 earlier in the session.
US gold futures for December delivery rose 1.1 percent to USD3,850.80. The US dollar index also fell 0.3percent, making greenback-priced bullion less expensive for overseas buyers. “Safe-haven demand focused on the potential US government shutdown” is one of the driving factors behind gold’s rally, said David Meger, director of metals trading at High Ridge Futures. “The dollar is under some light pressure in response to that, certainly supporting the precious metals complex.” US President Donald Trump is scheduled to meet with top congressional leaders from both parties later on Monday to negotiate an extension of government funding. Without a deal, a federal shutdown would begin on Wednesday.
Meanwhile, Russia’s defence ministry said its forces had taken control of the village of Shandryholove in Ukraine’s eastern Donetsk region. Gold, which tends to perform well in low-interest-rate environments and during times of uncertainty, has climbed 45percent so far this year. The US Personal Consumption Expenditures Price Index came in line with expectations on Friday, bolstering market confidence in potential rate cuts by the Federal Reserve at its October and December meetings.
“The PCE data from last week was viewed as not standing in the way of an additional one or two Fed rate cuts... they continue to be a supportive factor for gold and silver,” Meger said.
Separately, Newmont said CEO Tom Palmer would retire by the year-end, after spending more than a decade with the world’s largest gold miner. Rival Barrick also announced the resignation of CEO Mark Bristow earlier in the day. Elsewhere, spot silver climbed 1.7 percent to USD46.78 per ounce, hitting a more than 14-year high. Platinum gained 1.7 percent to USD1,594.90, a 12-year high, while Palladium fell 0.4 percent to USD1,265.25.
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