Gold prices surged to a new record in early Asian trading on Monday, boosted by a sharp decline in the Japanese yen and growing expectations of further U.S. rate cuts. Spot gold rose 1% to $3,926.63 per ounce, while December futures hit a record $3,951.32, extending last week’s strong rally.
The move came after Sanae Takaichi won Japan’s ruling Liberal Democratic Party (LDP) leadership race, paving the way for her to become the next prime minister. Her dovish fiscal stance suggests the Bank of Japan may slow its tightening pace, sending the USD/JPY up 1.4% to 149.58 and prompting investors to seek refuge in gold.
In the U.S., the federal government shutdown entered its second week, with budget negotiations showing little progress. President Donald Trump’s deployment of the California National Guard in Portland sparked legal and political backlash, further fueling safe-haven demand.
According to CME FedWatch, traders are now pricing in a near-100% chance of a 25-basis-point rate cut in October, giving gold solid support near record highs. Among other metals, platinum gained 1.2% to $1,627.17, silver rose 0.6% to $48.29, while copper lagged amid softer industrial demand.