Gold and silver surge as U.S. debt worries overshadow shutdown optimism

[Extreme close-up on stacks of gold and silver bullion]
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Gold prices (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) rose 2% to $4,079.78 an ounce on Monday, while silver surged nearly 3% as investors juggled emerging U.S. economic weakness and progress toward ending the government shutdown.

"Gold and silver have started the week with firmer conviction, extending Friday’s rebound and signalling that investors remain willing to add exposure to precious metals despite another rise in bond yields," Ole Hansen, head of commodity strategy at Saxo Bank, said.

For gold, the macro backdrop is unusually mixed, as signs of weakening U.S. economic momentum are emerging, while political negotiations appear to be nudging Washington toward ending the government shutdown.

"A reopening would restore data flow and revive expectations for a December rate cut, but more importantly, it shifts market focus back to the deteriorating U.S. fiscal outlook," Hansen added.

"Rising bond yields increasingly reflect fiscal unease rather than tighter monetary expectations—a dynamic that supports investment metals."

TECHNICAL OUTLOOK:

Hansen argues that for precious metals, the broader environment remains favorable, as gold and silver thrive in periods where macro uncertainty broadens beyond inflation and monetary policy into fiscal credibility and political risk.

Silver is performing even more forcefully after clearing resistance at $49.30 to focus on $50, the next major level, both from a psychological marker and a technical barrier.

Elevated volatility in silver has been a recurring theme this year, but the broader pattern of strong demand, tightness in parts of the physical market, and speculative rebuilds has kept the medium-term trend intact.

SUPREME COURT TARIFF RISK AND MARKET CONSEQUENCES:

"Should the U.S. Supreme Court reject Trump's tariffs, markets would likely see increased short-term volatility and some notable shifts, with a removal being akin to a tax cut improving stock market sentiment while lowering the geopolitical temperature."

However, the decision would worsen an already challenging US debt situation, which, has been a key source of support for precious metal investments in the past couple of years, Hansen noted.

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