Gold and Silver Gain as U.S. Government Shutdown Continues

 

Gold and Silver Gain as U.S. Government Shutdown Continues

(Bullion News Network) – Gold and silver prices gained on Friday, with both metals recouping Thursday’s losses to end the week in the green. The spot price of gold added just over $30 per troy ounce, setting a fresh all-time high above $3,889/ozt. This comes after a moderate loss on Thursday that drove the metal down to the $3,850-60 range. Silver moved in a similar direction on Friday, adding over $1 per troy ounce to its spot price after shedding more than $0.30/ozt the day before. The price action favored silver, driving the gold-silver ratio down more than a point to its lowest rate since October of 2024. Markets missed a key U.S. unemployment report on Friday as the government entered its third day of the ongoing shutdown. 

Platinum also gained today, logging its second consecutive day in the green and adding over $35/ozt to its spot price. Both platinum and silver gained considerably after China announced a new initiative to lower its pollution numbers by 10% or more in the next decade. The move is expected to increase demand for platinum and silver, two metals used in the production of solar panels. Palladium prices moved up on Friday, lagging slightly behind platinum and gaining just over $20 per troy ounce. The gap between platinum group metal prices continued to grow on Friday; platinum now holds more than a $330 price advantage over palladium.

Safe haven buying continues to drive gold and silver prices. The U.S. government officially shut down on October 1st after the Senate was unable to secure the 60 votes required to pass appropriation bills. In the latest signal of political uncertainty in the U.S., Republicans argued that Democrats caused the shutdown by refusing to vote for the Republican-backed spending bill. Democrats are asking Republicans to reverse cuts to Medicaid and roll back cuts to several government health agencies. Gold and silver pulled back on the second day of the shutdown but gained ground on Friday, setting a new 14-year high for silver and an all-time high in the gold market.

Silver continued to outpace gold’s performance on Friday, with the precious metal gaining over $1 per troy ounce and driving the gold-silver ratio to a 2025 low. While gold’s price action is primarily backed by speculation surrounding interest rates, geopolitical uncertainty, and an increasingly shaky U.S. employment market, China’s surprise climate action announcement at a U.N. climate change summit last week is pushing the price of silver sharply higher. Solar panels are a growing demand driver for silver, and the solar energy sector is now the largest source of industrial demand for the precious metal. Silver prices ended Friday over 16% higher than they were on September 3rd.

Interest rate speculation is expected to remain a major factor in precious metal prices heading into October. Although the government shutdown meant no U.S. employment report on Friday, experts anticipate that the job market slowdown likely continued in September, giving the Federal Reserve a bit more motivation to cut rates by another 25 basis points at its October meeting. CME FedWatch now projects a 94.6% probability that the FOMC will vote to cut rates by 25 bps in October, up from 87.7% last week. Precious metals like gold and silver have historically thrived during periods of falling interest rates, and the inflationary impact of an interest rate cut can further drive demand for safe haven assets.

Gold, silver, and platinum ended Friday in the green. Gold added over $30/ozt to its spot price, securing a new all-time high in the process. Silver prices jumped by over $1/ozt, setting a fresh 14-year high and driving the metal past $48 per troy ounce. Platinum continued to put distance between itself and palladium, gaining over $35 per troy ounce as markets remained bullish on Chinese green energy demand for both platinum and silver. The gold-silver ratio fell by over 1 point, marking its lowest rate in nearly a year.