Gold rises above $4,100 as 'run-it-hot' policy, Trump tariff rebate prospects fuel rally

Gold futures (GC=F) jumped on Monday on hopes of renewed government spending amid the prospect of an end to the shutdown end to the shutdown, plus potential tariff rebates, fueling a broader market rally.

Gold rose more 2% to touch $4,100 per ounce, its highest level in two weeks after the Senate advanced a bill to end the shutdown as early as this week.

The bounce came after President Trump floated the idea of "dividend of at least $2,000" per person, which Treasury Secretary Scott Bessent suggested could come in the form of a tax break.

"President Trump’s comments about potential tariff-linked rebates underscore how expansive fiscal ideas are once again shaping the outlook," said Daniela Hathorn, senior market analyst at capital.com.

"In this 'run-it-hot' environment — with governments spending more even as inflation remains above target — gold’s renewed strength may signal investors hedging against the possibility of hotter inflation and renewed policy uncertainty," she added.

The jump also comes as the Senate released a bill that could end the government shutdown. A reopening would allow for economic data to be released and inform the Federal Reserve’s decision on potential rate cuts in December. Last month, Fed Chair Jerome Powell remained noncommittal about a December reduction after announcing one in October.

Precious metals become more attractive in an easing interest rate environment relative to yield-bearing assets.

COMEX - Delayed Quote•USD

(GC=F)

Follow View Quote Details

4,104.70

+94.90

+(2.37%)

As of 12:15:28 PM EST. Market Open. Advanced Chart

Gold futures are up 57% year-to-date in a stunning rally that came to an abrupt halt in October. The precious metal is still on pace for its best year since 1979, driven by central bank purchasing, increased inflows into exchange-traded funds (ETFs), and bar and coin purchases.

While Macquarie Group recently predicted gold has peaked after hitting all-time highs north of $4,350 in October, other Wall Street analysts remain bullish, expecting further gains.

“We remain bullish on gold, viewing it as an effective portfolio diversifier and hedge," wrote Ulrike Hoffmann-Burchardi, CIO Americas and global head of equities at UBS Global Wealth Management on Monday.

"We maintain our price target of USD 4,200/oz over the next 12 months, while any significant rise in political and financial market risks could push gold toward our upside target of USD 4,700/oz."Gold prices jumped on Monday amid hopes of an end to the US government shutdown and tariff rebates. REUTERS/Mariya Gordeyeva/File Photo·Reuters / Reuters

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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