October 7, 2025
Gold prices soared to a new record on Tuesday, driven by the ongoing U.S. government shutdown and strong expectations of a Federal Reserve rate cut this month. Spot gold increased by 0.1% to $3,962.63 per ounce, after reaching a peak of $3,977.19 earlier in the day. U.S. gold futures for December delivery rose by 0.2% to $3,985.30.
The likelihood of rate cuts in October and December remains high, with probabilities exceeding 80%, according to Kelvin Wong, a senior market analyst at OANDA. This, along with the unresolved government shutdown, is supporting gold prices.
Despite Kansas City Federal Reserve Bank President Jeff Schmid's reluctance to cut rates further, markets are still anticipating 25 basis-point reductions in both October and December, with probabilities of 93% and 82%, respectively, as per the CME FedWatch tool.
Gold has gained 51% this year, fueled by strong central bank purchases, increased demand for gold-backed exchange-traded funds, a weaker dollar, and rising interest from retail investors amid trade and geopolitical tensions.
Goldman Sachs recently raised its December 2026 gold price forecast to $4,900 per ounce, citing strong Western ETF inflows and central bank buying. China's central bank added gold to its reserves for the eleventh consecutive month in September.
In other precious metals, spot silver remained steady at $48.49 per ounce, platinum decreased by 0.1% to $1,624.11, and palladium increased by 0.8% to $1,329.63.
