Spot Gold extended its move upwards to a new all-time high of $3,871.40/oz. on Tuesday and was set to register its best monthly performance since August 2011.
The metal has been underpinned by concerns of a possible US government shutdown and rising expectations the Federal Reserve will continue easing its monetary policy this year.
There has been little progress at a White House meeting between US President Trump and his Democratic opponents, aimed to stave off a government shutdown, which could affect a range of services as early as Wednesday.
“The looming government shutdown creates a haze of uncertainty over the market, which has served to accelerate gold’s gains,” KCM Trade Chief Market Analyst Tim Waterer was quoted as saying by Reuters.
“The $4,000 level now seems a viable year-end target for gold whilst market dynamics such as lower interest rates and ongoing geopolitical hotspots keep working in favour of the precious metal.”
In the meantime, the latest US PCE inflation data reinforced expectations that the Federal Reserve could ease policy further by year-end.
Annual core PCE inflation has remained steady at 2.9% in August, while annual PCE inflation has accelerated to 2.7% from 2.6% in July.
Markets are now pricing in about an 89% chance of a 25 basis point Fed rate cut in October and a 72% chance of another 25 bps cut in December.
Spot Gold was last up 0.97% on the day to trade at $3,871.15 per troy ounce.
The yellow metal has surged 11.91% so far in September.
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