The gold price surged to a historic high above $3,800 an ounce on Monday, as investors poured into safe-haven assets amid mounting fears of a U.S. government shutdown, a weakening dollar, and uncertainty surrounding Federal Reserve policy.
Bullion climbed as much as 1.4% to $3,812.05 an ounce, surpassing the previous record set just last week. The milestone marked gold’s sixth straight week of gains, underscoring its resilience in a volatile economic environment.
Silver, platinum, and palladium also posted strong rallies, boosted by persistent supply tightness and increased demand through exchange-traded funds.
Dollar Weakness Fuels Rally
The latest spike in the gold price coincided with a decline in the U.S. dollar, which slipped as markets awaited a crucial meeting between congressional leaders and President Donald Trump.
Without a last-minute deal, federal funding is set to expire, threatening a government shutdown that could delay vital economic data, including the September payrolls report.
For gold investors, a weaker dollar is particularly significant. Because the precious metal is priced in dollars, any decline in the greenback makes gold cheaper and more attractive to international buyers, providing additional upward momentum.
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Fed Policy Uncertainty Adds to Demand
Another driver behind the rising gold price is growing speculation over the Federal Reserve’s next move. Economists expect softer jobs growth, which could strengthen the case for interest rate cuts in October. Lower rates generally favor gold, which does not yield interest, by reducing the opportunity cost of holding it.
Still, uncertainty remains high. Some Fed officials have signaled caution, pointing to stronger-than-expected economic data.
Meanwhile, concerns over the Fed’s independence have come into play after legal challenges involving Fed Governor Lisa Cook sparked political tensions.
Analysts argue this adds a “Fed-related premium” to gold as investors seek a hedge against potential policy disruptions.
A Stellar Year for Gold
So far, 2025 has been remarkable for precious metals. The gold price has jumped more than 45% this year, driven by central bank demand, investor appetite for safe-haven assets, and a series of Fed rate cuts.
Bullion-backed ETF holdings are now at their highest level since 2022, showing strong institutional participation.
Leading banks, including Goldman Sachs and Deutsche Bank, project that the rally has further to run.
Analysts note that gold remains undervalued relative to U.S. Treasuries and the dollar, making it an appealing hedge in an uncertain environment.
Precious Metals in Tight Supply
While gold dominates headlines, its peers are also experiencing significant gains. Silver has soared past $45 an ounce for the first time in 14 years, reaching levels not seen since 2011.
Platinum crossed the $1,600 mark for the first time since 2013, and palladium jumped nearly 3% to its highest since July.
Tight supply is amplifying these moves. Several years of deficits have left stockpiles dwindling in key markets like London.
Lease rates for silver, platinum, and palladium have surged, reflecting the premium investors must now pay to borrow physical metal.
Adding to the uncertainty, platinum-group metals could face fresh challenges under Trump’s Section 232 investigation into critical minerals.
Analysts warn that palladium, in particular, may be subject to new U.S. import tariffs when the review concludes in October.
Outlook: Gold Price Poised for More Gains
As of early Monday afternoon in Asia trading, spot gold held near $3,806 an ounce. With political risk, economic uncertainty, and supply pressures all colliding, analysts suggest the gold price may remain on a strong upward trajectory.
For American investors, the latest rally reinforces gold’s role as a reliable hedge against volatility.
Whether Washington avoids a shutdown or not, the gold price story of 2025 is shaping up to be one of historic highs with more potential records on the horizon.
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