PRECIOUS-Gold hits record high as US shutdown, weak job data spur safe-haven rush

By Anmol Choubey

Oct 1 (Reuters) - Gold prices surged to a record high on Wednesday, driven by investor demand for safe-haven assets after the start of the U.S. government shutdown and as soft labour data bolstered expectations of Federal Reserve rate cuts.

Spot gold XAU= was up 0.1% at $3,860.13 per ounce, as of 0613 GMT, after hitting an all-time high of $3,875.32.

U.S. gold futures GCcv1 for December delivery gained 0.4% to $3,887.40.

The dollar index .DXY fell to an over one-week low, making greenback-priced gold more affordable for overseas buyers. Wall Street futures slipped. USD/ MKTS/GLOB

Gold is benefiting from "concerns over a weaker dollar, and the political situation with the standoff about a government shutdown in the U.S. and also general geopolitical uncertainty," said Nicholas Frappell, global head of institutional markets at ABC Refinery.

He added that the outlook remains bullish, with upside targets pointing to $3,900-plus, possibly up to $4,000.

The U.S. government shut down much of its operations as deep partisan divisions prevented Congress and the White House from reaching a funding deal, setting off what could be a long, grueling standoff that could lead to the loss of thousands of federal jobs.

The shutdown could delay the release of key economic data, including the non-farm payrolls report due on Friday.

The ADP National Employment Report, due later in the day, is expected to offer additional labor market insights.

Potential risks to gold's rally include an uptrend in the dollar, unexpected hawkish Fed policy shifts, and fiscal reforms in the United States, said Michael Hsueh, precious metals analyst, Deutsche Bank.

Gold, a traditional hedge against economic and political uncertainty, thrives in a low-interest-rate environment due to its non-yielding nature. It has gained more than 47% this year.

Markets in China, the world's largest gold consumer, remained closed for the mid-autumn festival and will reopen on October 9.

Elsewhere, spot silver XAG= gained nearly 0.5% to $46.90 per ounce, hitting a more than 14-year high. Platinum XPT= fell 0.7% to $1,563.50, while palladium XPD= was down 0.9% at $1,245.43.

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