PRECIOUS-Gold gains nearly 2% on optimism about US government reopening

By Noel John

Nov 12 (Reuters) - Gold prices climbed nearly 2% on Wednesday as U.S. Treasury yields slipped ahead of a House vote to reopen the government, a move that could revive economic data releases and bolster expectations for a Federal Reserve rate cut in December.

Spot gold XAU= rose 1.7% at $4,195.77 per ounce, its highest level since October 21, as of 11:58 a.m. (1658 GMT).

U.S. gold futures GCcv1 for December delivery rose 2.1% to $4,202.20 per ounce.

Benchmark U.S. 10-year yields US10YT=RR fell 1.3% to their lowest level since November 5. US/

"The government is opening up in the U.S. and the market is anticipating economic data releases, which in all likelihood will show that the American economy has weakened," said Bart Melek, head of commodity strategies at TD Securities, adding that traders might be increasing longs and covering some short positions.

The Republican-controlled House of Representatives is due to vote later in the day on a deal to end the longest government shutdown in U.S. history.

The 42-day shutdown has weighed on the economy and halted government data, prompting policymakers and markets to rely on private indicators to gauge the state of the economy.

Spot silver XAG= gained 4.3% to $53.43 per ounce, its highest level since October 17.

"There's a lot of concern right now especially in silver that supplies are very low. What you're seeing right now in gold is a spillover from silver this morning," said RJO Futures market strategist Bob Haberkorn.

Meanwhile, Tuesday's weekly jobs data from ADP showed private employers shed an average of 11,250 jobs a week in the four weeks ending October 25, signalling continued weakness in the labor market.

Traders now see a 63% probability of a 25-basis-point rate cut at the Fed's meeting in December, according to CME Group's FedWatch tool.

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

Elsewhere, platinum XPT= rose 1.9% to $1,614.75 and palladium XPD= was up 1.7% to $1,468.98.

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