Semenya ran the flawless tactical race as she sat back within striking distance before unleashing a devastating surge over the final 200m.
The 27-year-old's victory by more than two seconds sliced 1.1 sec off Budd's 1984 South African record and earned Semenya her first Commonwealth medal, to go with her swathe of Olympic and world titles over 800m.
For the time being, the South African was able to forget how IAAF council members last month approved a hyperandrogenism policy which it wants to take effect in November.
Semenya's margin of victory was all the more remarkable considering each of the top six in the race would have broken the previous Games record.
Her time today was particularly impressive considering she was content to sit in the pack and not push until the final stages.
When she attacked‚ nobody could respond‚ although the two medallists behind her both set personal bests‚ Chepkoech 4:03.09 and Melissa Courtney of Wales 4:03.44.
He carried-on around the bend to celebrate with the national flag - and deliver some customary celebratory press-ups - as his rivals slumped on the track showing noticeably more fatigue. Javon Francis of Jamaica got bronze in 45.11, edging out India's Muhammed Anas Yahiya who placed fourth in a national record of 45.31.
"Disappointment is disappointment [in] 2017, now we are focused again on the 2018, so we forgot about what happened in 2017", he said.
Ronald Levy was not affected by the rain which made 110m hurdling extra tricky moments before the athletes were introduced.
Kitilit won heat three in 1:45.12 ahead of Scotland's Jake Wightman (1:47.43).
There was another nation 1-2 in the women's T54 1500m and this time it was for Australia, much to the crowd's delight.
Kimberly Williams led another Jamaican double in the triple jump from Shanieka Ricketts. Finishing third with a jump of 13.92m, Thea Lafond claimed Dominica's first ever medal at the Commonwealth Games, across all sports.
Canadian Warner, the Rio Olympic bronze medalist, was leading but crashed out from medal contention after he neglected to clear a elevation, plunging from first in the standings to sixth.
Daley still has a chance to leave with a medal as the synchronised 10m platform, in which he won bronze at the 2016 Olympics with partner Dan Goodfellow, is deemed less unsafe.
Lindon Victor duly assumed the lead and held on in the concluding 1,500m to triumph with 8,303 points.
Semenya will be back on the track later this week looking to add the 800m title, the distance she is already the two-time Olympic champion, also defending world champion.