PRECIOUS-Gold gains on softer dollar, increasing bets of Fed rate cut

Nov 7 (Reuters) - Gold rose on Friday as the dollar slid after private-sector job reports indicated weakness in the U.S. labour market increasing expectations of another Federal Reserve interest rate cut, while a prolonged government shutdown also boosted safe-haven demand.

FUNDAMENTALS

Spot gold XAU= gained 0.5% to $3,996.72 per ounce by 0137 GMT.

U.S. gold futures GCcv1 for December delivery was up 0.3% at $4,004.40 per ounce.

The dollar retreated in early Asia trade, leading declines among major currencies, as investors lacking official data on the U.S. labour market, seized upon signs of weakness in private sector surveys. USD/

Meanwhile, benchmark U.S. 10-year yields US10YT=RR fell from a one-month high hit on Thursday.

The Fed cut interest rates last week and Chair Jerome Powell suggested it might be the last reduction in borrowing costs for the year.

The U.S. economy shed jobs in October amid losses in the government and retail sectors, while cost-cutting and the adoption of artificial intelligence by businesses led to a surge in announced layoffs, data showed on Thursday.

A weak jobs market typically makes interest rate cuts more likely.

A congressional impasse has resulted in what is now the longest-ever U.S. government shutdown, which has forced investors and the data-dependent Fed to rely on private sector indicators.

Non-yielding gold tends to do well in a low-interest-rate environment and during times of economic uncertainty.

Bullion has fallen close to 8% after hitting a record high of $4,381.21 on October 20.

Major stock indexes fell sharply, with technology and consumer discretionary shares leading losses in the S&P 500. MKTS/GLOB

Elsewhere, spot silver XAG= firmed 0.6% to $48.26 per ounce, platinum XPT= slid 0.6% to $1,532.09 and palladium XPD= rose 0.5% to $1,380.91.