Gold surges past $4,100 as US shutdown drags on
4 min read
Gold surged to unprecedented levels above $4,100 per ounce for the first time on Monday, as investors flocked to safe-haven assets amid a prolonged US government shutdown and escalating trade tensions between Washington and Beijing.
Spot gold rose as much as 2.8% to $4,125.89 per ounce, marking the eighth consecutive week of gains and pushing year-to-date returns above 55%. The precious metal's rally accelerated after President Donald Trump threatened to impose additional 100% tariffs on Chinese imports, though he later moderated his tone on Sunday.
Shutdown Enters Critical Third Week
The federal government shutdown, now in its 13th day, is poised to become the longest in US history according to House Speaker Mike Johnson, who indicated he would not negotiate with Democrats until they drop healthcare demands. The impasse has furloughed over 900,000 federal employees while another 700,000 work without pay.[1][2][3]
The Trump administration proceeded with mass federal layoffs last week, notifying over 4,100 workers of termination. Treasury Secretary Scott Bessent acknowledged on Monday that the shutdown is "hitting the economy," with each week reducing annualized GDP growth by approximately 0.1%.[3][4][5]
Critical economic data releases have been delayed, including the Consumer Price Index report moved from October 15 to October 24. This data blackout poses challenges for Federal Reserve policymakers as they weigh further interest rate cuts.[4][6][7]
Markets Price in Fed Accommodation
Despite the shutdown disrupting economic indicators, traders are pricing in a 97% probability of a 25 basis point Federal Reserve rate cut at the October 28-29 meeting, with full expectations for another reduction in December. Fed officials have signaled concern about weakening labor markets, even as inflation remains slightly above the 2% target.[1][2][3][4]
Bank of America elevated its 2026 gold forecast to $5,000 per ounce, citing persistent safe-haven demand and deepening macroeconomic uncertainty. The bank also sees silver testing $65 per ounce, with the white metal soaring past $51 on Monday for the first time in over four decades.[5][6][7][8]
The rally underscores investor anxiety over a "cocktail of uncertainties" including trade tensions, persistent inflation concerns, and fiscal dysfunction, as multiple analysts warn that gold's record performance signals deeper market unease.[7][9]
Reference sources:
[1](https://tradingeconomics.com/commodity/gold)[2](https://www.forbes.com/sites/simonmoore/2025/10/13/october-interest-rate-cut-broadly-expected-from-fed/)[3](https://www.cnbc.com/2025/10/08/fed-minutes-september-2025.html)[4](https://www.federalreserve.gov/monetarypolicy/fomcminutes20250917.htm)[5](https://www.mining.com/gold-price-notches-new-record-above-4100/)[6](https://goldsilver.com/industry-news/goldsilver-news/bofa-sees-5000-gold-as-inflation-and-fed-cuts-loom/)[7](https://markets.financialcontent.com/wral/article/marketminute-2025-10-13-gold-and-silver-shatter-records-as-global-turmoil-fuels-safe-haven-frenzy)[8](https://www.reuters.com/world/china/gold-hits-record-high-us-china-trade-woes-escalate-silver-scales-all-time-peak-2025-10-13/)[9](https://markets.financialcontent.com/stocks/article/marketminute-2025-10-13-golds-record-rally-a-harbinger-of-deeper-market-disquiet-strategists-warn)[1](https://www.cbsnews.com/live-updates/government-shutdown-2025-latest-house-senate-trump/)[2](https://www.aljazeera.com/news/2025/10/13/us-republican-leader-warns-government-shutdown-could-be-longest-in-history)[3](https://en.wikipedia.org/wiki/2025_United_States_federal_government_shutdown)[4](https://www.jpmorgan.com/insights/global-research/current-events/government-shutdown)[5](https://www.reuters.com/world/us/us-treasury-chief-says-government-shutdown-is-hitting-economy-2025-10-13/)[6](https://finance.yahoo.com/news/stocks-dip-as-government-shutdown-continues-rare-earths-rally-what-to-watch-this-week-114600627.html)[7](https://www.cnbc.com/2025/10/08/fed-minutes-september-2025.html)