Gold surged more than 2% Monday as investors grew increasingly confident that the Federal Reserve’s next move will be a rate cut, not another pause. Weak U.S. economic data and progress toward ending the historic government shutdown have added to the sense that the tightening cycle has run its course.
Spot gold briefly climbed above $4,100 an ounce before settling around $4,090, up 2.1% on the day. Futures in New York followed the same pattern, reflecting growing demand for safe-haven assets amid economic uncertainty.
The rally follows a string of soft economic reports suggesting the U.S. economy is losing momentum. If the government reopens soon, new data releases could make a December rate cut even more likely.
“When Washington gets back to normal, we’ll start seeing the numbers again—and that could reignite bets on a December cut,” said Ole Hansen, commodities strategist at Saxo Bank. “Gold still does what it’s always done in times like these—it protects value when confidence in policy wavers.”
According to CME Group’s FedWatch tool, traders now see a 67% chance of a rate cut in December and roughly 80% by January.
For many investors, gold has become the clearest hedge against an uncertain economy and a Fed that may have waited too long to pivot. The metal has already gained over 50% this year, hitting a record $4,400 an ounce in October before giving back some ground.
After two years of relentless tightening, the Fed’s next move could be what finally brings relief to markets—and gold is already flashing that signal.
