Gold is trading at a gain of more than 1% in mid-European trading today, Monday, September 29, the opening session of the week, recording a new record high above $3,800 per ounce. It is on track for its highest monthly close with gains exceeding 10% in September, supported by the first interest rate cut of the year and expectations of two additional cuts during the remainder of the year. Geopolitical tensions are also rising amid market anticipation of US labor market figures at the end of the week. The yellow metal is trading up about 1.28% at $3,807 per ounce, while silver is trading at $46.83 per ounce, up 1.82%, trading at its highest levels since May 2011.
The yellow metal, the world’s leading safe-haven asset, is benefiting from fears of a US government shutdown amid anticipation of a meeting between President Donald Trump and Democratic and Republican leaders this evening to discuss extending government funding to avoid a recession. The closure will begin on Wednesday if an agreement is not reached.
On a related note, official demand and holdings of gold exchange-traded funds (ETFs) are a major factor in gold’s gains, which exceeded 10% in September and 45% since the beginning of the year. The SPDR Gold Trust, one of the largest gold-backed ETFs in the world, announced a 0.89% increase in its holdings by the end of last week, reaching 1,005.72 metric tons, while total holdings of bullion-backed ETFs rose to their highest levels since 2022.
In addition to geopolitical tensions, gold is receiving support from a 0.25% decline in the US dollar index, trading at 97.61, amid rising expectations that the US Federal Reserve will cut interest rates in October and December. Markets are currently pricing in 89% and 68% odds of a 25 basis point rate cut in October and December, respectively, according to the CME’s Fed Watch tool. At the end of trading on Friday, markets await the US nonfarm payrolls (NFP), unemployment figures, and wages figures, which are typically released on the first Friday of each month. Estimates indicate the US economy added 51,000 jobs in September, the unemployment rate remained stable at 4.3%, and the wage rate remained stable at 0.3%.
Platinum, meanwhile, is trading at $1,606, up 2.43%, while palladium is up 0.35% at $1,274.