Gold prices hit a fresh record on Tuesday, closing in on the USD 4,000-an-ounce mark, as the US government shutdown and political uncertainty in France sent investors seeking safe-haven assets.
Bullion climbed to USD 3,977.44 an ounce after surging 1.9 per cent on Monday, according to media reports. The ongoing suspension of federal operations, now stretching into a second week, has deprived investors of key economic data, complicating the US Federal Reserve’s assessment of market conditions. Traders continue to price in a quarter-point interest-rate cut this month, a move that could further support gold, which does not pay interest.
The shutdown, now in its sixth day, has temporarily halted some government services, with nearly 40 per cent of the federal workforce—around 750,000 employees—expected to be on unpaid leave.
Meanwhile, political developments abroad are adding to the bullish sentiment. French Prime Minister Sebastien Lecornu resigned after failing to build consensus on budget spending, stalling efforts to rein in the euro area’s largest fiscal deficit. In Japan, Sanae Takaichi’s near-certain appointment as prime minister has also rattled markets, coming weeks after Shigeru Ishiba stepped down following parliamentary elections.
US President Donald Trump’s policies, aimed at reshaping global trade and geopolitics, have also contributed to a roughly 50 per cent rise in gold prices this year. Central banks and gold-backed ETFs have been active buyers, while the Fed’s recent interest-rate cut and prospects for more easing have bolstered the rally.
Goldman Sachs has raised its December 2026 forecast to USD 4,900 an ounce from USD 4,300, citing continued ETF inflows and central-bank purchases. Spot gold was trading around USD 3,963.95 an ounce as of 10:27 a.m. in Singapore, putting the metal on track for its largest annual gain since 1979. Silver hovered above USD 48 an ounce, while palladium rose and platinum remained flat. |
