Gold climbs above $3,900 level for first time

Gold prices touched an all-time high on Monday, soaring above the $3,900-per-ounce level, as investors flocked to safe-haven bullion amid the US government shutdown, broader economic uncertainty, and prospects of further Federal Reserve rate cuts.

Spot gold was up 1.5 percent at $3,942.59 per ounce, as of 0910 GMT, after hitting $3,949.34 earlier in the session.

US gold futures for December delivery climbed 1.5 percent to $3,967.10. Washington will start mass layoffs of federal workers if US 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.

"Appetite for gold remains heavily stimulated by the ongoing US government shutdown," said Lukman Otunuga, senior research analyst at FXTM. "There may be some FOMO buying on the current price but for others there is likely a sense that this particular financial lifeboat has sailed," said independent analyst Ross Norman.

Gold has climbed nearly 50 percent so far this year, underpinned by strong central bank buying, increased demand for gold-backed exchange-traded funds, a weaker dollar and growing interest from retail investors seeking a hedge amid rising trade and geopolitical tensions.

This rally, characterised by low participation and primarily driven by central banks with a long-term outlook and steady investors rather than speculative buyers, indicates that any pullback might be milder than expected, Norman said, adding that this could present a buying opportunity on dips while the rally maintains its momentum.

Alternative data from both public and private sources indicate signs of weakness in the US labor market amid the government shutdown.

Investors are now pricing in a 25-basis-point cut at the Fed meeting this month, with an additional 25 bp cut anticipated in December.

"We see both fundamental and momentum-based reasons for gold to rally further, and now expect bullion to reach $4,200/oz by the end of this year," UBS said in a note.

Non-yielding gold thrives in a low-interest-rate environment and during economic uncertainties.

Spot gold broke the $3,000-per-ounce level for the first time in March.

Many brokerages have turned bullish on the rally.