Gold Hits New Record Level

SadaNews - The price of gold recorded a new record level today, Monday, supported by a strong rise in precious metals, amid a state of anticipation in the markets regarding the possibilities of a U.S. government shutdown and its impact on the release of crucial job data this week, which could complicate the outlook regarding the monetary policy direction of the "Federal Reserve".

The price of an ounce of gold rose by 1% to reach an unprecedented level of $3,798.73, surpassing the peak it reached last Tuesday, continuing its gains for the sixth consecutive week. Silver also climbed by 1.2%, and both platinum and palladium posted strong gains, supported by tightening supply and strong inflows into exchange-traded funds backed by these metals.

Investors are closely monitoring the anticipated meeting today between President Donald Trump and congressional leaders, just 24 hours before federal government funding expires unless a temporary spending bill is agreed upon. In the event of a shutdown, the release of vital data such as the jobs report scheduled for Friday would be at risk, a report expected to show a slowdown in job growth during September.

Any weakness in employment data will bolster market expectations for interest rate cuts at the Fed's meeting in October, a scenario that favors gold as it does not yield a return. However, the path of interest rates remains unclear, as statements from Fed officials have varied regarding the next move, while some economic data has exceeded expectations.

Meanwhile, concerns about the independence of the "Federal Reserve" continue, especially after member Lisa Cook's lawyer requested that the Supreme Court keep her in office, coinciding with her legal battle against Trump's attempt to remove her.

A Hedge with Surprising Value

Experts from "Barclays," including Thymistocles Fioutakis and Lefteris Farmakis, stated in a memo on Sunday that gold does not seem overvalued compared to the dollar and bond yields; rather, "it should include a risk premium associated with the potential decline of Fed independence," adding that this "makes it a hedge with surprising value."

Gold prices have jumped by more than 40% since the beginning of the year, achieving new record levels supported by strong demand from central banks and expectations of a return to U.S. interest rate cuts. The yellow metal is set to record its third consecutive quarterly gain, amid rising holdings of gold-backed exchange-traded funds to their highest level since 2022. Both "Goldman Sachs" and "Deutsche Bank" expect this upward trend to continue.

Conversely, the rest of the precious metals have experienced unprecedented tightening this year, raising concerns about the declining available inventories traded in London, with the supply deficit increasing in recent years. The leasing rates for silver, platinum, and palladium have risen to levels significantly above normal.

Analysts from "Citi Group" led by Max Layton warned that market tightening has worsened due to concerns that platinum group metals may be included in Trump's investigations under Section 232 related to critical metals, which could increase the likelihood of tariffs being imposed on palladium imports. The results of the review are expected to be released later in October.

As of 10:29 AM Singapore time, spot gold rose by 0.9% to $3,793.94 per ounce, while the Bloomberg dollar index decreased by 0.2%.

Silver jumped to its highest levels since 2011 after breaking the $45 barrier last week for the first time in 14 years, trading today up by 0.8% to $46.46 per ounce. Platinum rose by 2% to $1,613.52, while palladium increased by 2.2% to its highest level since July.