Gold surpasses $3800 for first time ever

Gold prices rose in the European market on Monday, extending gains for a third consecutive session and continuing to set fresh records, as they broke above the $3,800 per ounce mark for the first time ever. The rally was fueled by a weaker US dollar, pressured by the looming risk of a federal government shutdown.

Following last week’s US Personal Consumption Expenditures (PCE) report, markets became more convinced of the likelihood that the Federal Reserve will cut interest rates in October, with investors awaiting further evidence later this week.

Price Overview

• Gold prices today: Spot gold rose about 1.4% to an all-time high of $3,812.11, up from an opening level of $3,760.36, with a session low matching the open at $3,760.36.

• On Friday, gold settled 0.3% higher, marking its second straight daily gain after moderate US inflation data.

• Last week, gold climbed 2.1%, its sixth consecutive weekly gain, the longest winning streak since late December 2024.

US Dollar

The dollar index fell 0.3% on Monday, extending losses into a second session and pulling back from a three-week high of 98.61, reflecting continued weakness against major currencies.

A weaker dollar makes dollar-priced bullion more attractive to holders of other currencies. In addition to profit-taking, the greenback remains under pressure from the risk of a US government shutdown if Congress fails to pass a funding bill before the fiscal year ends on Tuesday. Without a deal, parts of the government will shut down on Wednesday, the first day of fiscal year 2026.

Ray Attrill, head of FX strategy at National Australia Bank, said: “The prevailing assumption is that if the government shuts down, we won’t get new US jobs data this week, which complicates trading in markets.”

US Interest Rates

• Last Friday’s PCE inflation data matched expectations.

• According to the CME FedWatch Tool: Odds of a 25-basis-point Fed rate cut in October rose from 88% to 90%, while odds of no change fell from 12% to 10%.

• To further reprice expectations, markets are awaiting a series of key US labor market reports this week, along with fresh Fed commentary.

Outlook for Gold

• Kyle Rodda, analyst at Capital.com, said: “The positive US inflation reading gave markets reason to believe more Fed rate cuts will come in October and December.”

• He added: “Sentiment is very positive, and we’re on track to retest another record high this week. The gold market is in a strong position right now.”

SPDR Holdings

Holdings at SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 8.87 metric tons on Friday to 1,005.72 metric tons, the highest since July 29, 2022.