Gold stormed into history on Monday after making yet another all-time high, trading dangerously close to $4,000 per ounce as traders scrambled for safety during the ongoing U.S. government shutdown and growing bets on more Federal Reserve rate cuts.
Spot gold surged by 1.2% to $3,992, after touching $3,944 earlier in the day, and U.S. gold futures for December also jumped 1.2% to $3,965.
Gold’s rally has been relentless this year, with prices up nearly 50%, thanks to aggressive purchases by global central banks, surging inflows into gold-backed ETFs, a weaker dollar, and retail investors stacking bullion to protect themselves.
Asian markets surge on the back of Japan while yen plunges
In Asia, markets added their own twist to the day’s chaos. Japan’s Nikkei 225 index ripped higher by more than 4% after the Liberal Democratic Party chose Sanae Takaichi as its new leader on Saturday, setting her up to become the country’s first female prime minister, as Cryptopolitan extensively reported.
The Nikkei closed up 4.75% at 47,944.76, carried by real estate, tech, and consumer stocks. In a note, Crédit Agricole CIB said Takaichi would likely push the Bank of Japan to stick with easy policy but hinted she could support a 25-basis-point rate hike by January 2026.
“A Takaichi administration, recognizing that the current economy is still weak, is expected to completely shift policy direction to a new approach (complete overhaul) that seeks to expand investment and demand through public-private partnerships,” the bank wrote.
The Topix index followed, rising 3.1% to 3,226.06, setting its own record, though the mood was dented by the yen, which weakened more than 1.81% to the critical 150 per dollar level it hadn’t been breached by since August, according to data from CNBC.
Traders remembered October 2022, when the yen slid beyond 151 and forced the Ministry of Finance to intervene. Investors are now watching for any repeat action from Tokyo.
Elsewhere in commodities, copper rose 0.7% to $10,785.50 a ton by mid-morning in Singapore. Iron ore slipped 0.3% to $103.60 a ton, with thin volumes as China headed into a holiday.
Bitcoin steadies as stocks split
Bitcoin joined the story, notching a new high on Sunday for the first time since August, with an outstanding win to $125,689. At press time, Bitcoin is holding steady at little over $124,000, and analysts are split on where it goes next.
Rachael Lucas of BTC Markets said traders see $135,000 as the next barrier, with $150,000 in sight if momentum holds. But with leverage building, any reversal could trigger volatility, as options activity is loaded with bullish bets, with more than 60% of positions in calls.
Lucas warned that such heavy optimism could lead to cascading liquidations if sentiment cracks. Data from CoinGecko shows October has been Bitcoin’s best month, averaging gains of 22.5% over the past decade. Traders have even branded it “Uptober.”
U.S. stock futures offered little direction. Dow Jones Industrial Average futures edged up 37 points, or 0.1%. S&P 500 and Nasdaq-100 futures were also up 0.1%. The S&P 500 and Nasdaq Composite just wrapped up their fourth gain in five weeks, adding 1.1% and 1.3%. The Dow climbed 1.1% last week, its third rise in four weeks.
Wall Street remains bullish, with Tom Lee, head of research at Fundstrat, predicting that:- “Nevertheless, we think this is a ‘sidebar’ issue and probabilities heavily favor stocks remaining strong from October to December this year. In fact, we see S&P 500 reaching at least 7,000 by year-end — and maybe higher.”
In Europe, momentum broke down. The Stoxx 600 fell 0.4% at 9:05 a.m. London time after five straight sessions of gains, which included an all-time high last Thursday.
France’s CAC 40 dropped 2% after Sebastien Lecornu resigned only weeks into his role, throwing Paris into more political mess. French banks led losses, with Societe Generale, BNP Paribas, and Credit Agricole all plunging more than 5%.
