Gold prices slip back from record highs; U.S. shutdown looms

Gold prices slipped back from hit fresh record highs Tuesday, after having earlier extended their strong run as markets fretted over a seemingly imminent U.S. government shutdown.

At 08:55 ET (12:55 GMT), Spot gold fell 0.4% to $3,819.07, falling back from a record high of $3,871.72 an ounce, while gold futures slipped 0.2% to $3,847.50. after hitting a peak of $3.893.72/oz.

The yellow metal was sitting on a roughly 17% gain in the third quarter, boosted by persistent bets on more interest rate cuts by the U.S. Federal Reserve. 

Additionally, “gold has increased by nearly 45% this year, supported by central bank purchases, the resumption of interest rate cuts, inflows into ETF holdings, and geopolitical tensions,” ING said.

Gold upbeat on shutdown risk 

Gold saw increased safe haven demand this week amid increasing conviction that U.S. lawmakers will not be able to avert a government shutdown.

Congress has until midnight (04:00 GMT Wednesday) to pass a spending bill and avoid the closure of hundreds of federal institutions. 

A Republican-backed spending bill was recently able to clear the House of Representatives, but is now facing resistance in the Senate. Republicans hold a 53-seat majority in the Senate, but require at least 60 votes to approve the spending bill. 

Bipartisan talks with President Donald Trump on Monday appeared to have done little to break the political impasse, which is centered around disagreements over healthcare spending and social welfare programs.