Gold prices surged as U.S. lawmakers made progress toward ending the country’s longest-ever government shutdown, a development that could bring much-needed clarity to the Federal Reserve’s interest-rate outlook.
Bullion climbed as much as 2.1% to around $4,080 an ounce after a group of Senate Democrats supported a procedural move to advance a Republican funding bill. A potential reopening would restore access to key economic data—such as jobs and inflation—allowing the Fed to better gauge monetary policy decisions.
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Gold had already gained late last week amid signs of a weakening labor market and poor consumer sentiment. With official data releases on hold, Fed officials have been operating with limited visibility, with some expressing concern about cutting rates without confirmed inflation figures.
Although a possible December rate cut remains on the table, Treasury yields rose broadly Monday, reflecting investor unease over U.S. fiscal stability rather than expectations of tighter policy, according to Ole Hansen, commodities strategist at Saxo Bank. “A reopening would revive rate-cut expectations, but more importantly, it refocuses markets on the deteriorating U.S. fiscal outlook,” Hansen noted, adding that rising yields driven by fiscal worries have historically supported gold.
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Despite retreating about 6% since reaching a record above $4,380 an ounce in mid-October, gold remains up more than 50% this year. The rally continues to be underpinned by geopolitical uncertainty, economic headwinds, and persistent central bank demand—most notably from China’s central bank, which added to its gold reserves for the 12th consecutive month in October.
As of 10:50 a.m. in London, spot gold rose 1.9% to $4,077.30 an ounce, while silver gained 3.3%. Platinum and palladium also advanced, and the Bloomberg Dollar Spot Index held steady.
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