(Bloomberg) — Gold climbed to a record above $3,800 an ounce as precious metals surged, boosted by a weaker dollar as investors weighed a potential US government shutdown.
Bullion rose as much as 1.4% to an all-time high of $3,812.05 an ounce — eclipsing a peak reached last Tuesday — after notching six straight weekly gains. Silver increased as much as 2.4%, while platinum and palladium also rallied strongly, with gains underpinned by persistent market tightness and inflows into exchange-traded funds backed by the metals.
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The dollar fell as investors awaited developments ahead of a planned meeting between top US congressional leaders and President Donald Trump on Monday — a day before federal funding would expire if an agreement on a short-term spending bill can’t be reached. A shutdown would threaten the release of key data including Friday’s payrolls report, which economists expect would show subdued jobs growth in September. A weaker greenback makes precious metals cheaper for most buyers.
Weaker employment figures would bolster the case for easing by Fed officials at their next rate decision in October — a scenario that would make non-interest bearing precious metals more attractive. Still, there’s a high degree of uncertainty over the outlook for the Fed’s cutting cycle, with officials voicing diverging views on monetary policy, while some economic data came in stronger than expected.
Traders also continued to weigh threats to the US central bank’s independence, after Fed Governor Lisa Cook’s attorneys on Thursday urged the Supreme Court to let her stay on the job while she fights Trump’s attempt to fire her.
Bullion doesn’t look overpriced relative to the dollar and Treasuries, which “ought to contain a level of Fed-related premium, given the nature of the risk” from the central bank’s potential loss of independence, Barclays Plc. strategists including Themistoklis Fiotakis and Lefteris Farmakis said in a note on Sunday. “This makes it a surprisingly good value hedge,” they added.
Gold has soared 45% this year, setting successive peaks on central-bank demand and a resumption of interest-rate cuts by the Fed. Prices are on track to close out a third consecutive quarterly gain next week, with holdings in bullion-backed ETFs at the highest since 2022. Banks including Goldman Sachs Group Inc. and Deutsche Bank AG have said they expect the rally to extend.
