Gold prices rose on Monday despite a notable strengthening of the US dollar against most major currencies, as investors sought safe-haven assets amid heightened geopolitical concerns.

The US government shutdown entered its sixth day, with repeated failures to pass a temporary funding bill due to disagreements between Republicans and Democrats. This has delayed the release of key economic data ahead of the Federal Reserve’s meeting later this month.

At the upcoming meeting, markets widely expect the Fed to cut interest rates by 25 basis points, reflecting concerns over a weakening labor market.

Geopolitical tensions also weighed on market sentiment after French Prime Minister Sébastien Lecornu resigned on Monday morning — just 24 hours after forming his government and less than a month after taking office — deepening the political crisis in the eurozone’s second-largest economy.

Meanwhile, the US dollar index rose by 0.4% to 98.1 points at 21:05 GMT, after reaching an intraday high of 98.5 and a low of 97.9.

As of 21:06 GMT, spot gold prices surged 2% to $3,984.5 per ounce.

The global copper market has witnessed an exceptional year marked by crises. On September 8, around 800,000 tons of wet material flooded multiple levels of the Grasberg Block Cave mine in Papua, Indonesia, forcing a suspension of all underground operations. The incident added another major disruption to the wave of mining and supply challenges that have hit the copper industry in 2025.

According to reports, the mud reached the level where development teams were operating, killing two workers. Following the accident, Freeport-McMoRan Inc. declared force majeure, citing its inability to meet contractual obligations due to an unforeseen natural disaster.

Grasberg is the world’s second-largest copper mine, accounting for more than 3% of global supply. The disruption is expected to affect copper and gold sales in the fourth quarter of this year and constrain supply through 2026.

Previous forecasts had projected output at about 1.7 billion pounds of copper and 1.6 million ounces of gold, but next year’s copper production outlook has now been cut by 35%. Full recovery is not expected before 2027, with gradual restart operations anticipated next year.

Copper Supply Disruptions in 2025

The Grasberg shutdown adds to a long list of setbacks that have shaken the copper industry this year, including:

• A tunnel collapse at Codelco’s El Teniente mine in Chile.

• Flooding at Ivanhoe’s Kamoa-Kakula mine in the Democratic Republic of Congo.

• Operational challenges at Teck Resources and Anglo American.

Between July 31 and August 1, 2025, a seismic event caused a tunnel collapse at El Teniente, killing six workers and halting all underground operations. Codelco, Chile’s state-owned mining company, suspended extraction and placed its Caletones smelter under preventive maintenance after running out of feedstock.

El Teniente produces about 400,000 metric tons of copper annually, making it one of the world’s key suppliers.

Grasberg’s Impact Could Extend Through 2027

Even before the Grasberg accident, analysts estimated that roughly 497,000 tons of copper output had already been lost to operational disruptions by the end of August. With Grasberg offline, the global supply outlook has worsened significantly.

According to a Reuters report citing analysts from Benchmark Mineral Intelligence, roughly 600,000 tons of contained copper are expected to be lost between September 8 and the end of 2026 due to the Grasberg shutdown alone.

The collapse marks a critical inflection point for global supply dynamics, at a time when demand for copper continues to surge thanks to its essential role in electronics, renewable energy infrastructure, and data centers.

These events underscore the fragility of global mining infrastructure and highlight the urgent need for investment in safety systems, automation, and resilient supply chains. Analysts believe the effects of these disruptions will persist at least through 2027.

Price and Trade Effects Following Grasberg

The world’s 20 largest copper mines are expected to account for about 36% of total global output in 2025, yet most are facing growing geological, operational, and social challenges.

BMI has raised its 2026 copper supply deficit forecast from just 72,000 tons to 400,000 tons. Citi Bank issued a similar outlook, warning of an additional 350,000-ton shortfall in 2027 unless copper prices rise enough to spur new supply.

Goldman Sachs also lowered its global production estimates, projecting Grasberg’s output could fall by 260,000 tons in 2025 and 270,000 tons in 2026—a total loss of 525,000 tons. The bank cut its global production forecast by 160,000 tons for the second half of 2025 and by 200,000 tons for 2026.

Following the Grasberg accident on September 8, copper futures surged to $10,485 per ton, their highest level in 15 months. The market saw a similar 12% spike to $9,707.50 per ton after the El Teniente shutdown.

Raw sugar prices rose on Monday in New York, reaching a three-week high as the market recovered from last week’s pressure following the delivery of 1.5 million tons for the settlement of October futures contracts.

Alvean and Cofco were among the main recipients of the October contract deliveries. Both companies are owned by groups operating sugar mills in Brazil, the world’s largest sugar producer — a development traders interpreted as a sign that prices may be nearing a new bottom.

Although prices have fallen by about 13% since the start of the year due to expectations of abundant global supply, the market has begun to show signs of relative stabilization as the October contract winds down.

Bruno Lima, head of agricultural commodities at StoneX, told Bloomberg that the market is maintaining its recovery momentum following the end of the October contract, adding that “short-term fundamentals haven’t changed much.”

As of 17:01 GMT, raw sugar futures for March delivery rose by 1.94% to 16.79 cents per pound.

US stocks rose on Monday at the start of trading, supported by gains in the technology sector, particularly the ongoing momentum in artificial intelligence shares.

Markets, however, remain under pressure from the continued US government shutdown, which has delayed the release of the monthly jobs report, as well as from warnings about stretched valuations, especially within the tech sector.

Shares of AMD and OpenAI climbed following the announcement of a multibillion-dollar deal between the two companies, while Nvidia’s stock declined as it came under pressure from the same development.

As of 15:57 GMT, the Dow Jones Industrial Average fell by 0.2% (116 points) to 46,642, while the S&P 500 rose by 0.2% (14 points) to 6,730, and the Nasdaq Composite gained 0.4% (97 points) to 22,877.