Spot Gold Surges 2% on Fed Rate Cut Bets and Safe-Haven Demand

Key TakeawaysSpot gold jumped 2% on October 20, fueled by expectations of Federal Reserve rate cuts.Safe-haven demand rose amid the U.S. government shutdown and global trade uncertainty.Analysts see potential for gold to reach $4,500 in the coming months.According to TechFlow, spot gold prices surged 2% on Monday, October 20, as investors priced in a near-certain Federal Reserve rate cut and increased safe-haven buying amid ongoing political and economic turbulence.Jeffrey Christian, managing partner at CPM Group, said that rising political risks and economic concerns are driving renewed gold demand. He added that prices could continue to climb “over the next several weeks or months,” potentially reaching $4,500 per ounce.The rally came as the U.S. government shutdown entered its 20th day, delaying the release of key macroeconomic indicators. The Senate’s failure to resolve the budget impasse has heightened uncertainty, prompting investors to seek safety in gold.Meanwhile, traders are awaiting the U.S. Consumer Price Index (CPI) data expected this Friday, which could influence the pace of monetary easing. Market participants currently assign a 99% probability of a Fed rate cut next week, with a second cut potentially coming in December.