Gold at all-time high on safe-haven demand, Fed rate cut bets

Gold hit a record high on Tuesday as there were no signs of a reprieve from an impasse between the two houses of the U.S. Congress that had led to a government shutdown, while near-certain bets of a Federal Reserve rate cut this month provided support.

Spot gold was up 0.1% at $3,965.39 per ounce by 0308 GMT, after hitting an all-time high of $3,977.19 earlier in the session. U.S. gold futures for December delivery gained 0.3% to $3,988.10.

“The (chances of) October and December cuts are still skewing above the 80% mark so that’s actually supporting gold prices and also this government shutdown as well given there is still no resolution between the two sides of the U.S. Congress,” OANDA senior market analyst Kelvin Wong said.

Kansas City Fed Bank President Jeff Schmid signaled he is disinclined to cut interest rates further, saying Fed should stay focused on the danger of too-high inflation as opposed to apparent job market weakness.

Markets, however, are still pricing in additional 25 basis-point rate cuts in both October and December, with probabilities of 95% and 83%, respectively, according to the CME FedWatch tool.

Non-yielding gold thrives in a low interest rate environment and during economic uncertainties.

Gold has climbed 51% so far this year on strong central bank buying, increased demand for gold-backed Exchange-Traded Fund (ETFs), a weaker dollar and growing interest from retail investors seeking to hedge amid rising trade and geopolitical tensions.

Goldman Sachs raised its December 2026 gold price forecast to $4,900 per ounce from $4,300 on Monday, citing strong Western exchange-traded fund (ETF) inflows and central bank buying.

Elsewhere, spot silver eased 0.1% to $48.49 per ounce, platinum fell 0.4% to $1,619.62 and palladium rose 0.1% to $1,325.71.