Gold and Silver Reach New Highs As Government Shutdown Looms

 

Gold and Silver Reach New Highs as Government Shutdown Looms

(Bullion News Network) – Gold prices jumped on Monday, logging a third consecutive gain and setting a new all-time high of over $3,833 per troy ounce. The spot price of silver also increased by nearly $0.90/ozt. The price action was largely even between the two metals, and the gold-silver ratio stayed largely unchanged on the day at around 81.5:1. The spot price of gold has continued to increase following the Federal Reserve’s September meeting, where the FOMC voted to cut interest rates by 25 basis points. On Monday, a looming government shutdown in Washington, D.C. drove safe haven asset prices higher.

The U.S. government may be heading toward a shutdown. Democrats in Congress have demanded that Republicans vote to extend provisions of the Affordable Care Act and retract key Medicaid cuts made earlier this year. The conflict runs the risk of a government shutdown, which is triggered when the U.S. government is unable to secure funding appropriations for major government agencies. U.S. President Donald Trump plans to meet with Republican officials on Monday afternoon in an effort to prevent the shutdown, which could have major consequences for both Republicans and Democrats in government.

Gold and silver, safe haven assets that tend to thrive in periods of uncertainty, climbed as the shutdown deadline looms. The price of gold increased by nearly $70 per troy ounce on Monday, with heightened safe haven demand driving the precious metal to a fresh all-time high of above $3,830 per troy ounce. Silver prices also increased considerably, with the metal crossing $37/ozt for the first time since 2011 and gaining almost $0.90 per troy ounce on the day. 

Silver prices are also being driven by a surprise green energy announcement by China last week. President Xi Jinping revealed to world leaders during a United Nations meeting that China plans to reduce its pollution numbers by 10% or more in the next decade, a move likely to breathe more life into the country’s solar energy program, which is the largest in the world. Silver and platinum are both key components in the production of solar energy panels and fuel cells, and both precious metals gained immediately after China’s UN announcement. Silver and platinum prices continued to increase on Monday, with silver gaining nearly $0.90/ozt and platinum prices jumping by more than $22 per troy ounce. 

Fresh developments in the Russia-Ukraine conflict could also be pushing safe haven asset values higher. Over the weekend, Russia orchestrated a series of large-scale drone and missile strikes on Kyiv and other major regions in Ukraine. The Trump administration recently considered arming Ukraine with Tomahawk cruise missiles, which are capable of striking targets at a range of around 1,000 miles. These weapons would give Ukraine the capacity to strike Moscow directly, although analysts say that giving Tomahawk missiles to Ukraine risks further escalating the conflict between the two countries. Safe haven assets like gold tend to thrive during periods of geopolitical uncertainty and war.

This combination of factors was a perfect storm for gold, silver, and other safe haven assets. Gold prices were already on the rise in mid-September after the Federal Reserve voted to cut interest rates for the first time in 2025. The looming threat of a government shutdown, as well as escalating conflict in Ukraine and an announcement from China that could lead to heightened demand for silver and platinum, made for a strong start to the last week of September. 

The spot price of gold is poised to end Monday up nearly $70 per troy ounce. Silver prices gained nearly $0.90/ozt on the day. Platinum logged gains amounting to almost $22 per troy ounce. The gold-silver ratio increased by fewer than ten cents on Monday and is set to finish at just over 81.6:1.