Gold prices soared to unprecedented levels on Monday, surpassing $3,800 per ounce for the first time as global investors sought safety amid economic and political uncertainty.

Gold hits new milestone

Spot gold jumped 1.6% to $3,820.96 per ounce by mid-morning in New York, after briefly touching a record high of $3,831.19. U.S. gold futures for December delivery also climbed, rising 1.1% to $3,850.80.

Drivers behind the rally

The surge in gold was fueled by several factors including expectations of U.S. Federal Reserve rate cuts, a 0.3% drop in the U.S. dollar index, concerns over a potential government shutdown, and escalating geopolitical tensions.

David Meger, director of metals trading at High Ridge Futures, commented on the trend:

“Safe-haven demand focused on the potential U.S. government shutdown is one of the driving factors behind gold’s rally. The dollar is under some light pressure in response to that, certainly supporting the precious metals complex.”

Federal Reserve and economic data

Market sentiment for gold was further bolstered by the U.S. Personal Consumption Expenditures Price Index, which matched expectations and reinforced speculation that the Federal Reserve may cut rates at its upcoming October and December meetings.

Meger also noted:

“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.”

Precious metals and industry news

Gold has now gained 45% year-to-date.

Silver also surged, hitting a 14-year high at $46.78 per ounce, while platinum reached a 12-year peak at $1,594.90.

Industry updates included the announced retirements of Newmont CEO Tom Palmer and Barrick CEO Mark Bristow, two major figures in gold mining.