Gold hits 39th record this year above $3,970

Gold pushed to a fresh record above $3,970 per oz. on Tuesday as investors sought safety amid a United States government shutdown, political turmoil in France and rising bets on further Federal Reserve rate cuts.

Spot prices spiked in early trading before easing slightly, with futures briefly cracking the $4,000 (C$5,580) mark. The surge adds to a year-to-date gain of about 50%. It also continues a rally that sped up after Washington’s partial federal shutdown left markets without important economic data, complicating the Fed’s decision-making process. Derivatives markets are now discounting two 25-basis-point cuts before year‑end.

“Political tension, strong options‑market activity and currency weakness played a key role in gold’s performance last month,” the World Gold Council’s (WGC) Goldhub team said in a note, which also flagged record monthly (ETFs) exchange-traded fund inflows ($17.3 billion; 146 tonnes) and counted the 39th all‑time high of the year. Bullion remains a useful portfolio hedge even after the sharp run‑up, the WGC said

Brics’ buy up

Central banks in China, India and other Brics (Brazil, Russia, India, China and South Africa) nations “continue to buy gold to support greater trade in their local currencies,” London-based SP Angel fund analyst John Meyer said. Institutional exchange-traded funds buying and a softer U.S. dollar have reinforced the uptrend.

Mounting policy uncertainty is also pushing gold higher. “Funds are flowing into gold as a default currency with investors unsure of what other currency – or what else – to buy,” Meyer said.

Global gold ETFs recorded their strongest month on record in September, led by North America and Europe, with Asia joining the rally. WGC data shows net inflows of about $17.3 billion (146 tonnes), taking total holdings higher and adding momentum to prices.

High expectations

With rate‑cut expectations firming and geopolitical risk heightened, analysts say dips are likely to be shallow near‑term. Still, the WGC cautions that after such a rapid ascent, technical fatigue and headline‑driven volatility are possible as prices test round‑number levels.

Markets are pricing two further Fed cuts by year‑end, while the U.S. shutdown (now in its second week) and efforts to form a government in France have amplified safe‑haven demand.

The U.S. dollar index has weakened, adding a mechanical tailwind to dollar‑denominated bullion.

Copper firms

Copper traded around $10,600 per tonne on Tuesday as the market digests supply losses following Freeport-McMoRan’s (NYSE: FCX) mud‑rush incident at the Grasberg mine in Indonesia.

Banks and consultants have changed their 2025 balances to show a big deficit. They warn that more disruptions could be “truly disastrous for a market already facing a significant shortfall,” wrote SP Angel’s Meyer.

Goldman Sachs and others have trimmed near‑term supply forecasts as concentrate buyers scramble to source alternative tonnes.

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