Gold and Oil Surge as Dollar Holds Steady Amid Optimism on Ending U.S. Shutdown

Gold prices hit a two-week high while oil climbed, fueled by optimism that the U.S. government shutdown may soon end. The dollar remained stable as investors weighed weak economic data and expectations for a final Federal Reserve rate cut.

Gold rose 2% to $4,079.83 per ounce in early Monday trading, marking its highest level since October 27. U.S. gold futures for December delivery gained 2.03% to $4,091.20 per ounce.

Tim Wotter, chief market analyst at KCM Trade, told Reuters: “Gold is seeing strong demand at the start of the trading week, rising amid speculation of a possible rate cut next month, despite the Fed reducing the likelihood.”

Last week’s data showed the U.S. economy lost jobs in October, with cost-cutting measures and AI adoption driving layoffs. Meanwhile, a Friday survey revealed U.S. consumer sentiment had dropped to its lowest level in nearly three and a half years, reflecting concerns over the economic fallout from the longest U.S. government shutdown in history.

According to CME’s FedWatch tool, market participants now see a 67% probability of a rate cut in December, supporting the rally in gold.

Oil prices also gained on hopes that the government shutdown would end soon, reducing uncertainty in global markets.