Gold prices tops $3,800/oz for first time amid U.S. shutdown risks, rate cut bets

Updates price moves, adds context 

Investing.com - Gold prices hit a record high above $3,800 per ounce on Monday as safe-haven demand was boosted by concerns over a potential U.S. government shutdown, which weighed on the U.S. dollar.

Ongoing bets that the Federal Reserve will further lower interest rates later this year also buoyed the yellow metal. Traders are currently pricing in roughly 40 basis points of Fed easing by the end of 2025, although this was about 25 basis points below the level seen earlier this month. Bullion tends to perform well when rates are brought down, as well as in times of economic or geopolitical uncertainty.

By 07:50 ET (11:50 GMT), spot gold had jumped by 1.8% to $3,827.19/oz, while gold futures had risen by 1.2% to $3,855.50/oz.

Broader metal prices also logged strong gains, with silver and platinum both surging. 

U.S. government shutdown looms 

Gold and precious metals were buoyed by increased haven demand, as markets braced for a potential U.S. government shutdown this week amid middling bipartisan attempts to push through a funding bill. 

Funding for U.S. federal operations is set to expire at midnight on September 30, with Congress having no replacement or extension funding in place.

Bipartisan negotiations over a funding bill remained ongoing. Republicans were seen pushing for a stop-gap funding bill till November, while Democrats were demanding that Congress reverse recent cuts to health care and Medicaid spending before any more funding bills can be approved. 

Congressional leaders from both parties are set to meet President Donald Trump on Monday. 

A government shutdown could delay the release of key nonfarm payrolls data due later this week, and stands to disrupt economic activity if left unresolved for a prolonged period. 

The U.S. government last partially shut down for a period of 35 days in late-2018 to early-2019. The Congressional Budget Office estimated that the shutdown had reduced gross domestic product by about $11 billion.

(Scott Kanowsky contributed reporting.)