Gold prices edged higher on Tuesday, supported by dovish expectations from the U.S. Federal Reserve and continuing uncertainty over trade and government policy, even as investors showed renewed risk appetite following progress in ending the U.S. government shutdown.
At 07:55 ET (12:55 GMT), spot gold was up 0.5% at $4,136.02 an ounce, while December gold futures gained 0.5% to $4,140.80/oz, keeping the precious metal close to a three-week high.
Gold holds firm despite progress on U.S. shutdown
The yellow metal maintained its strength even as the U.S. Senate passed a bill on Monday night to end the 41-day government shutdown, the longest in the country’s history. The bill now moves to the House of Representatives, where a vote is expected on Wednesday.
Analysts said that although progress on the shutdown lifted risk sentiment slightly, gold demand remained strong amid ongoing political and economic uncertainty. The metal recently rebounded above the $4,000/oz mark, shrugging off pressure from a stronger U.S. dollar.
Other precious metals followed suit — spot platinum rose 0.9% to $1,614.70/oz, while spot silver gained 1.4% to $51.03/oz.
Economic and trade tensions fuel gold rebound
According to analysts at ANZ Bank, gold’s rebound is being driven by safe-haven buying amid escalating concerns over U.S. trade policy and economic stability.
The U.S. Supreme Court recently questioned the Trump administration’s use of emergency powers to impose trade tariffs under the 1977 International Emergency Economic Powers Act, with the court’s ruling not expected until late this year.
Analysts warned that prolonged uncertainty could continue to support gold prices. “Whether or not the court rules that Trump wrongly imposed tariffs, it is likely that there are other laws he can draw on if needed. The market is likely to face months of uncertainty,” ANZ said in a note.
Adding to this, investors expect the Federal Reserve to cut interest rates again in December, given the potential drag of the extended shutdown on U.S. economic activity.
UBS forecasts gold at $4,700 amid global uncertainty
UBS strategists projected that gold prices could rise toward $4,700 per ounce, driven by sustained political and financial market risks. Even if the U.S. shutdown ends soon, the bank said lingering uncertainty will keep safe-haven demand elevated.
“We think gold prices can climb further, even if the potential end to the longest government shutdown in U.S. history supports risk sentiment,” said Ulrike Hoffmann-Burchardi, who led the UBS strategy note.
UBS highlighted ongoing concerns about the Supreme Court ruling on trade tariffs, the possibility of another partial government shutdown early next year, and rising global debt levels as key reasons for persistent gold demand.
The bank also pointed to recent data from the World Gold Council, showing record gold demand in the September quarter, driven by investment inflows and central bank purchases. UBS expects total demand for 2025 to be the strongest since 2011.
Conclusion
Despite improved optimism over the U.S. government’s reopening, traders remain cautious amid policy uncertainty, potential Fed easing, and geopolitical risks — all of which continue to support gold’s bullish trend. With forecasts of a move toward $4,700/oz, the metal remains a favoured hedge for investors navigating a volatile global economy.