Mumbai, Oct 1 (IANS) The price of gold is hovering around a record high on Wednesday, amidst growing concerns of a US government shutdown, while weak labour data strengthened expectations of further interest rate cuts by the Federal Reserve.

The price of 24-carat gold (10 gram) rose to a new high of Rs 1,15,350 on Wednesday, according to data published by the India Bullion and Jewellers Association (IBJA).

On Tuesday, the price of bullion closed at Rs 1,16,903 per 10 grams as per IBJA data. US gold futures for December delivery rose 0.7 per cent to $3,901.

Precious metals remained volatile on Tuesday, with gold and silver slipping from early highs as traders booked profits. Later in the evening session, both metals recovered from their intraday lows as hedging activity increased.

In September, the price of yellow metal increased by 11.4 per cent, making it the second highest monthly surge after August 2011.

Analysts said that the uncertainty over US political negotiations is driving safe-haven demand, prompting investors to hedge through precious metals.

The dollar index hovered near a one-week low, making dollar-priced gold more affordable for overseas buyers.

Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said that gold has support at $3830 to $3810, or Rs 1,15,800 to 1,15,180 while resistance is at $3884 to 3910 or Rs 1,16,950 to 1,17,300.

Silver has support at $46.60 to 46.30, while resistance is at $47.40 to 47.70, he added.

Meanwhile, India’s gold and silver imports touched record highs in September despite elevated prices, while the rupee’s slide to record lows further supported domestic bullion prices. The US Senate failed on Tuesday to pass legislation extending government funding, pushing the country closer to a shutdown, while President Donald Trump threatened additional federal workforce cuts.

The shutdown could delay the release of key economic data, including the non-farm payrolls report on Friday.

Further data on marginal growth in US job openings in August has bolstered expectations for additional easing by the Federal Reserve, with traders pricing in a 97 per cent likelihood of a 25-basis-point reduction this month and a 76 per cent chance in December. Gold has outperformed Indian equities for the fourth consecutive Diwali-to-Diwali cycle, continuing a trend where the yellow metal has outperformed equities in seven of the last eight years.

–IANS

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