Gold surged to fresh record highs during Monday's Asian trade, with safe-haven flows gathering pace as investors fretted over the possibility of a United States government shutdown and shifted expectations on Federal Reserve policy easing.
By 3:50 pm AEST (5:50 am GMT), spot gold was up $50.32, or 1.3%, at US$3,810.85 per ounce, breaking through the $3,800 mark for the first time.
The rally came as the U.S. dollar lost further ground. Investors sought shelter in the traditional store of value as concerns deepened that the government could shut down at the start of the new fiscal year on 1 October.
Traders also weighed uncertainty over whether the September nonfarm payrolls report would be released in the event of a shutdown.
Gold’s move follows a string of upbeat U.S. data last week that underlined the economy’s resilience, challenging expectations for two Fed rate cuts this year.
This week, investor focus will turn to job openings, private payrolls data, and the ISM manufacturing and services PMIs, culminating in Friday’s closely watched nonfarm payrolls report.
The outcome will provide key insight into the health of the labour market and help shape the outlook for Fed policy - a crucial driver of both the U.S. dollar and non-yielding assets such as gold.
In the meantime, trade developments, geopolitical headlines, and commentary from Fed officials are expected to steer near-term gold price action.
