Washington: Gold surged over 1% to a new record high past$3,900 an ounce on Monday as US shutdown worries added to themomentum from expectations of more Fed rate cuts.
Spot gold jumped 1.5% to $3,943.01 per industry-standard ounce inEuropean trade while US gold futures were up 1.5% at $3,966.37.
Uncertainty caused by the US government shutdown buoyed safe-havendemand for the precious metal. The government shutdown entered itssecond week, with Democrats standing firm on health-care benefits andPresident Trump threatening layoffs and budget cuts.
Trump has threatened to institute mass firings of government workersas soon as Monday, when the Senate is scheduled to again vote on astopgap spending measure.
On the economic front, a preliminary reading on US consumer sentimentfor October, the release of minutes of the latest Federal Reservemeeting, and a scheduled address from several Federal Reserveofficials, including Fed Chair Jerome Powell, will be in thespotlight as the week progresses.
Powell is due to deliver a speech at a banking conference inWashington on Thursday.
As concerns mount about the economic impact of a prolonged USgovernment shutdown, CME Group's FedWatch Tool currently indicates a96.7% chance the Fed will cut rates by a quarter point in October,and an 84.9% chance of another quarter point rate cut in December.
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