Bullion has risen 12.1% so far in September, and is on track for its best month since August 2011, if current momentum persists

Gold prices rose to hit a new high on Tuesday and were poised for their best month in 14 years amid high demand for the safe-haven metal.

Spot gold was up 0.9% at $3,866.90 per ounce, as of 0501 GMT. Bullion has risen 12.1% so far in September, and is on track for its best month since August 2011, if current momentum persists.

The looming (U.S.) government shutdown creates a haze of uncertainty over the market, which has served to accelerate gold’s gains, said KCM Trade Chief Market Analyst Tim Waterer.

The $4,000 level now seems a viable year-end target for gold whilst market dynamics such as lower interest rates and ongoing geopolitical hotspots keep working in favour of the precious metal, he added.

In the U.S., President Donald Trump and his Democratic opponents appeared to make little progress at a meeting aimed at heading off a government shutdown that could disrupt a wide range of services as soon as Wednesday.

Recent U.S. economic data has lifted expectations for further central bank rate cuts this year, with traders pricing in a roughly 89% probability of a 25-basis-point reduction at the bank’s next meeting, according to CME Group’s FedWatch tool.

St. Louis Federal Reserve President Alberto Musalem said he was open to further rate cuts but the central bank must be cautious and keep rates high enough to continue to lean against inflation.

Gold, often used as a safe store of value during times of political and financial uncertainty, thrives in a low-interest-rate environment.

Indicative of sentiment, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings increased 0.60% to 1,011.73 metric tons on Monday, their highest since July 2022.