By Noel John and John Biju
(Reuters) -Gold prices rose on Tuesday to hover near record highs, buoyed by concerns over a looming U.S. government shutdown, while soft jobs data bolstered expectations of Federal Reserve rate cuts.
Spot gold rose 0.3% to $3,845.33 per ounce as of 11:06 a.m. ET (1506 GMT), rebounding from earlier losses in U.S. hours. Prices hit a record high of $3,871.45 during Asian trading.
U.S. gold futures for December delivery rose 0.5% to $3,873.20.
“Gold is showing remarkable resilience again, effortlessly clawing back early losses after uninspiring U.S. JOLTs data that won’t stand in the way of another rate cut in a month’s time,” said Tai Wong, an independent metals trader.
“The looming US government partial shutdown adds to uncertainty and adds to the chorus of ‘buy gold’.”
U.S. job openings increased marginally in August while hiring declined, consistent with softening labor market conditions that could allow the Federal Reserve to cut interest rates again next month.
Traders are currently pricing in a 97% chance of an interest rate cut at the Federal Reserve’s October meeting, according to CME Group’s FedWatch tool. Non-yielding gold tends to thrive during periods of uncertainty and low interest rate environments.
Bullion has risen 11.6% so far in September, and is on track for its biggest monthly percentage gain since August 2011. It is up 16.5% for the quarter.
Washington braced for a looming government shutdown on Tuesday, with Republicans and Democrats still deadlocked and unlikely to strike a deal before the midnight funding deadline.
“Any shutdown that lasts for a prolonged period is going to have an adverse effect on economic performance in the United States and that encourages easing by the Federal Reserve, which would very likely be a positive for gold,” Melek added.
The U.S. Labor Department said Monday its statistics agency would halt data releases – including Friday’s closely-watched monthly jobs report – if a partial government shutdown occurs.
Elsewhere, spot silver lost 0.7% to $46.62 per ounce but has climbed 17.3% so far this month. Platinum fell 1.5% to $1,576.75 and palladium lost 1.1% to $1,252.39.
(Reporting by Noel John, John Biju and Kavya Balaraman in Bengaluru; Editing by Leroy Leo)
