(RTTNews) – Gold prices soared on Monday – opening the week on a high note to reach a new record high – as rate cut expectations continue to get stronger amid the ongoing U.S. government shutdown along with the intensifying Russia-Ukraine war triggering concerns about the U.S. getting drawn in, leading to further escalation.
Front Month Comex Gold for October delivery surged by $132.70 (or 3.34%) to $4,108.60 per troy ounce.
Notably, this is a new record close for gold prices, which have increased for two consecutive sessions.
Front Month Comex Silver for October delivery too skyrocketed by $3.1920 (or 6.80%) to $50.130 per troy ounce.
Notably, this is a new record close for silver prices which were also up for two consecutive sessions.
In the U.S., the federal government’s partial shutdown entered day number 13 today.
With around 750,000 federal employees out of work with no pay and facing a bleak future as U.S. President Donald Trump has indicated that a large number of them may not be reinstated, concerns of an increase to existing joblessness have intensified. Around 4,000 federal workers have so far received “Reduction in Force” notices.
For the markets, as key economic data releases are blocked, without official data to rely upon, both the markets as well as the U.S. Federal Reserve are in the dark about the economic scenario.
Today, U.S. Treasury Secretary Scott Bessent stated that the shutdown is getting serious and is affecting the economy.
As a respite, last week the Bureau of Labor Statistics announced that it will publish the September 2025 Consumer Price Index on Friday, October 24, 2025.
Deprived of reliable economic indicators to factor in before deciding on interest rates at their month-end monetary policy meeting, the Fed is compelled to lean on private and other data sources.
However, according to CME Group’s FedWatch Tool, investors are at betting on a 96.7% chance of a 25-basis-point interest rate cut in the upcoming October 28-29 Federal Reserve’s meeting.
In Europe, as a defensive response to previous weeks’ Ukrainian drone attacks targeting Russian oil refining facilities and infrastructures, in just a week, Russia has launched 3,100 drones and 92 missiles at Ukraine.
Ukraine asked the U.S. to provide them with Tomahawk missiles, but Russia has already expressed its displeasure to this and warned that such help from the U.S. could transform the war to the next level.
This escalation with no resolution in sight is supporting gold prices.
Trade relation between the U.S. and China turned sour last week. After learning of China’s curbs on export of rare earth minerals (essential for manufacturing and technology sectors), Trump announced 100% tariffs (additionally) on China starting November 1, and he also threatened to levy export control on “critical software”.
However, China stood firm and urged the U.S. to settle conflicts through negotiations rather than coercion.
Nearly 70% of the world’s rare earth minerals are produced by China. The country handles 90% of these crucial minerals’ global processing, which are essential in the manufacturing and maintenance of laptops, smartphones, electric vehicles, radars, and jet engines.
Later on Sunday, Trump adopted a reconciliatory tone. On his social media platofrm Truth Social, Trump posted, “Don’t worry about China, it will all be fine!” Despite the softening of Trump’s stance, gold did not pull back from traveling upwards.
In the Middle East, as part of phase one of the Gaza Peace Plan, proposed by Trump which took shape last week in Egypt’s Sharm el-Sheikh resort, the swapping of Israeli hostages for Palestinian prisoners is now complete.
Again, the return of peace in the Middle East did not deter gold from moving upwards.
The ongoing U.S. government shutdown, Fed rate cut expectations, and intensifying Russia-Ukraine war contributed to yellow metal’s gains.
Gold being a dollar-denominated commodity, traders believe that its price will be determined by the value of the U.S. dollar, which will be directed by the outcome of this month-end Fed meeting.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
