Gold Reaches Record Above $3,900 This Monday

Gold prices have reached a record high of over $3,900 this Monday, driven by heightened economic and geopolitical uncertainty. This surge follows the Senate's decision last Friday to reject competing proposals aimed at extending federal funding, which has resulted in a prolonged paralysis. Consequently, significant economic reports, including the September non-farm payroll report, have been delayed. Investors are now relying on alternative indicators that suggest a weakening labor market, reinforcing expectations for an imminent interest rate cut. Markets are currently pricing in a roughly 95% probability of a 25 basis point cut in October, with an 84% chance of a similar reduction in December. In the absence of new data, traders will closely monitor statements from Federal Reserve officials this week for clues regarding the central bank's rate-cutting trajectory. Since the beginning of the year, gold prices have surged nearly 50%, fueled by increased economic uncertainty, expectations of further rate cuts, central bank purchases, and capital inflows into ETFs.