Gold fell on Tuesday as investors booked profits after prices hit a record high earlier in the session, while concerns about a US government shutdown and growing speculation of a Federal Reserve interest rate cut limited losses.

Spot gold fell 0.9% to $3,800.34 an ounce, as of 09:24 GMT, after rising 1% to a record high of $3,871.45 during Asian trading hours. Bullion prices have risen 10.4% so far in September and are on track for their biggest monthly percentage gain since July 2020.

US gold futures for December delivery fell 0.7% to $3,827.80. Swissquote external analyst Carlo Alberto De Casa said gold had pared gains due to profit-taking after rising as much as 1% during Asian trading hours and that "so far this is just a technical correction and we are not talking about an inversion."

US President Donald Trump and his Democratic opponents appeared to have made little progress in their White House meeting aimed at to prevent a government shutdown that could disrupt various services as soon as Wednesday.

"The risk of a government shutdown is positive for gold because it means uncertainty and that the Federal Reserve doesn't have clear data because the data could be late," De Casa added.

The market is pricing in an 89% chance of a 25 basis point interest rate cut at the Fed's October meeting, according to the CME Group's FedWatch tool. Investors are now awaiting a series of US data, including Friday's non-farm payrolls data, for further clues on the economy's health. The US Department of Labor confirmed on Monday that its statistical agency would suspend data releases, including the closely watched monthly employment report, in the event of a partial government shutdown.

UBS estimates gold could rise as high as $4,200/oz by mid-2026 in its bullish scenario, the bank said in a note on Tuesday. Gold, seen as a safe haven asset amid geopolitical and economic uncertainty, tends to perform well in low interest rate environments.

Shares of China's Zijin Gold International surged 66% in its Hong Kong trading debut, after the company raised $3.2 billion in An initial public offering (IPO), the largest transaction of its kind globally in 2025.

Elsewhere, spot silver fell 2% to $45.99 an ounce and has risen 16.1% so far this month. Platinum fell 4.5% to $1,529.80, and palladium fell 3% to $1,229.50. (alg)

Source: Reuters