PRECIOUS-Gold's record rally pauses as dollar ticks up

Oct 2 (Reuters) - Gold eased on Thursday from the record high hit the day before, pressured by profit-taking and a slight uptick in the dollar, although expectations of further U.S. rate cuts and political uncertainty lent some support to prices.

FUNDAMENTALS

Spot gold XAU= was down 0.2% at $3,858.50 per ounce, as of 0118 GMT, after hitting an all-time high of $3,895.09 on Wednesday.

U.S. gold futures GCcv1 for December delivery fell 0.4% to $3,883.60.

The dollar index .DXY was up 0.1% against its rivals, making gold more expensive for other currency holders. USD/

Data showed that U.S. private payrolls fell by 32,000 jobs in September after a downwardly revised 3,000 decline in August.

The U.S. government has shut down much of its operations, potentially putting thousands of federal jobs at risk, after partisan divisions prevented Congress and the White House from reaching a funding deal.

The shutdown could delay the release of economic indicators, including the closely watched non-farm payrolls (NFP) report scheduled for Friday.

Meanwhile, Wall Street's main stock indexes closed higher on Wednesday as investors looked past weaker-than-expected private payrolls data and uncertainty around the first day of the U.S. government shutdown.

Chicago Fed President Austan Goolsbee said he is starting to get more concerned about inflation, making him want to be "careful" about lowering interest rates.

Traders are pricing in a near-certain 25 basis-point cut to the Fed's key interest rate this month, according to the CME FedWatch tool.

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

The U.S. Supreme Court said it would hear arguments in January over Trump's attempt to remove Fed Governor Lisa Cook.

Elsewhere, spot silver XAG= slipped 0.5% to $47.07 per ounce, platinum XPT= fell 0.3% to $1,552.05 and palladium XPD= gained 1% to $1,256.93.

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