Oct 6 (Reuters) - Gold surged past $3,900 an ounce for
the first time on Monday, driven by safe-haven demand amid a
U.S. government shutdown, alongside growing expectations of
additional Federal Reserve rate cuts.
FUNDAMENTALS
* Spot gold rose 0.4% to $3,900.40 per ounce as of
0027 GMT after hitting an all-time high of $3,919.59 earlier in
the session.
* U.S. gold futures for December delivery gained
0.5% to $3,926.80.
* The Trump administration will start mass layoffs of
federal workers if U.S. President Donald Trump decides
negotiations with congressional Democrats to end a partial
government shutdown are "absolutely going nowhere," a senior
White House official said on Sunday.
* Fed Governor Stephen Miran pressed for an aggressive rate
cut trajectory again on Friday, citing the impact of Trump
administration's policies on the economy.
* According to the CME FedWatch tool, investors are pricing
in additional 25-basis-point cuts in both October and December,
with probabilities of 95% and 83%, respectively.
* Non-yielding gold thrives in a low-interest-rate
environment and during economic uncertainties.
* Gold has climbed 49% so far this year, after a 27% rise in
2024 on strong central bank buying, increased demand for
gold-backed Exchange-Traded Fund (ETFs), a weaker dollar and
growing interest from retail investors seeking a hedge amid
rising trade and geopolitical tensions.
* Physical gold demand in India rose last week despite
record high prices as a key festival in the world's
second-biggest bullion consumer boosted purchases. Meanwhile,
Chinese markets were closed for a holiday.
* SPDR Gold Trust, the world's largest gold-backed
ETF, said its holdings fell 0.08% to 1,014.88 metric tons on
Friday from 1,015.74 tons on Thursday.
* Elsewhere, spot silver was flat at $47.98 per
ounce, platinum rose 0.5% to $1,613.15 and palladium
gained 0.2% to $1,263.
DATA/EVENTS (GMT)
0030 UK S&P Global PMI: MSC Composite - Output Sep
(Reporting by Brijesh Patel in Bengaluru; Editing by Sumana
Nandy)
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