Gold Hits Record Highs Amid US Government Shutdown Concerns

Gold prices surged to fresh record highs in Asian trade on Tuesday, extending a strong rally over the past week as markets reacted to fears of an imminent U.S. government shutdown.

Persistent bets on additional interest rate cuts by the U.S. Federal Reserve also supported the precious metals market, although silver and platinum eased slightly after a sharp rally in the previous session. Copper prices retreated modestly.

Gold hit a record high of $3,865.73 an ounce, while other precious metals also saw significant gains, with the yellow metal up roughly 17% in the third quarter amid heightened safe-haven demand.

Shutdown Fears Drive Safe-Haven Buying

Markets are increasingly concerned that U.S. lawmakers may fail to pass a spending bill before the deadline at midnight on September 30 (0400 GMT Wednesday), which could trigger the closure of hundreds of federal institutions.

While a Republican-backed spending bill cleared the House of Representatives, it faces resistance in the Senate. Bipartisan discussions with President Donald Trump on Monday have done little to resolve disagreements over healthcare and social welfare funding.

A government shutdown could disrupt economic activity, delay key September data releases, and potentially lead to layoffs in thousands of government positions, raising concerns about further weakness in the labor market.

Metals Boosted by Rate Cut Expectations

Beyond gold, broader metals recorded moderate declines on Tuesday but remain strong in Q3, supported by expectations of lower U.S. interest rates. The Fed cut rates by 25 basis points earlier this month and indicated the possibility of two more reductions later in 2025, depending on inflation and labor market conditions.

The weaker dollar, combined with rate cut expectations, has helped buoy metal prices. Precious metals have outperformed, with some hitting more-than-decade highs. Industrial metals also saw strong quarterly gains, with copper and other key benchmarks up 5–11% in Q3.