WASHINGTON (dpa-AFX) - Gold surged over 1 percent to a new record high past $3,900 an ounce on Monday as U.S. shutdown worries added to the momentum from expectations of more Fed rate cuts. Spot gold jumped 1.5 percent to $3,943.01 per ounce in European trade while U.S. gold futures were up 1.5 percent at $3,966.37.
Uncertainty caused by the U.S. government shutdown buoyed safe-haven demand for the precious metal.
The government shutdown entered its second week, with Democrats standing firm on healthcare benefits and President Trump threatening layoffs and budget cuts.
Trump has threatened to institute mass firings of government workers as soon as Monday, when the Senate is scheduled to again vote on a stopgap spending measure.
On the economic front, a preliminary reading on U.S. consumer sentiment for October, the release of minutes of the latest Federal Reserve meeting and scheduled address from several Federal Reserve officials, including Fed Chair Jerome Powell, will be in the spotlight as the week progresses.
Powell is due to deliver a speech at a banking conference in Washington, D.C., on Thursday.
As concerns mount about the economic impact of a prolonged U.S. government shutdown, CME Group's FedWatch Tool currently indicates a 96.7 percent chance the Fed will cut rates by a quarter point in October, and an 84.9 percent chance of another quarter point rate cut in December.
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