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Gold nears all-time-high on Fed rate-cut betting, US shutdown

Gold prices were stable on Thursday and near their record highs from the previous day, thanks to expectations of more U.S. rate reductions and political uncertainty.

Gold spot held steady at $3,866.05 an ounce as of 0357 GMT after reaching a record high of $3.895.09 per ounce on Wednesday.

U.S. Gold Futures for December Delivery eased by 0.2% to $3.891.40.

"Weak ADP data before the non-farm payrolls reports has revived Fed cut bets in order to weaken US dollar. The U.S. shutdown has also given gold a boost, according to City Index's senior analyst Matt Simpson.

"Futures Market Positioning continues to show that large speculators, managers funds and hedge funds are chasing higher prices. Their net-long exposure is increasing but not at an extreme."

The data showed that private payrolls in the United States fell by 32,000 positions in September, after an August decline of 3,000 jobs was revised downwards.

After partisan disagreements prevented Congress from reaching an agreement on funding, the U.S. Government has closed down many of its operations. This could put thousands of federal jobs in danger.

The shutdown may delay the release Friday of the non-farm payrolls report (NFP), which is closely watched.

Chicago Fed President Austan Goolsbee has said that he's becoming more concerned with inflation and wants to be "careful".

According to CME FedWatch, traders are pricing in an almost certain 25 basis point cut to the Fed’s key interest rate for this month.

In an environment of low interest rates, gold, which is often used to store value in times of political or financial uncertainty, flourishes.

The U.S. Supreme Court announced that it will hear arguments in early January regarding Trump's attempts to remove Fed Governor Lisa Cook.

The price of palladium rose 1.7%, while platinum gained 0.1%, to $1,559, and silver fell 0.2%, to $47.22. (Reporting and editing by Subhranshu sahu, Janane Venkatraman, and Brijesh patel in Bengaluru)

(source: Reuters)