Spot gold was up 1.8% at $3,956.19 per ounce, after hitting a high of $3,969.91 earlier in the session

Gold surged to an all-time high above $3,900 per ounce on Monday, buoyed by economic and political uncertainty in France, Japan and the U.S., as well as growing expectations of a Federal Reserve rate cut this month.

Spot gold was up 1.8% at $3,956.19 per ounce as of 1841 GMT, after hitting a high of $3,969.91 earlier in the session.

Political developments in France, rising Japanese yields amid inflation concerns and the ongoing U.S. government shutdown are all contributing to gold’s rally, said Marex analyst Edward Meir.

France’s new Prime Minister Sebastien Lecornu and his government resigned on Monday, hours after taking office, deepening the country’s political crisis.

Meanwhile, the U.S. government shutdown entered its sixth day, with the White House threatening mass federal worker layoffs.

Gold has climbed 50% so far this year in a record run underpinned by sustained central bank purchases, resilient safe-haven demand and broad dollar weakness. Spot gold prices broke the $3,000/oz level for the first time in March and $3,800 in late September.

The fact that we’re so close to $4,000/oz also suggests that some of the funds might be trying to push it up to get to that mark, Meir added.

Non-yielding gold thrives in a low-interest-rate environment and during economic uncertainties.

Investors in the U.S. are now pricing in a 25-basis-point cut at the central bank meeting this month, with an additional 25-bp cut anticipated in December.

We see both fundamental and momentum-based reasons for gold to rally further, and now expect bullion to reach $4,200/oz by the end of this year, UBS said in a note.