Gold prices hit a record high on Tuesday, continuing a third straight session of gains, fueled by uncertainties in the U.S. economy and political scene, as well as expectations of further interest rate cuts by the Federal Reserve.  Spot gold held steady at $3,961.64 per ounce, as of 0055, after reaching a high of $3,977.19 earlier in the session. Gold futures in the U.S. for December delivery rose by 0.2%, hitting a price of $3,985.50.

The White House on Monday retracted President Donald Trump’s assertion about the immediate layoffs of government employees due to the shutdown, while warning that job losses might follow as the deadlock seemed likely to stretch into a seventh day. Kansas City Fed Bank President Jeff Schmid expressed hesitance about further lowering interest rates, arguing that as the Fed navigates the challenges of both excessively tight and overly accommodative policy, it must stay alert to the risk of high inflation. Markets are currently anticipating additional 25-basis-point rate cuts in both October and December, with probabilities at 95% and 83%, respectively.

Gold, lacking interest yield, often excels in settings marked by low interest rates and times of economic uncertainty. Gold has increased by 51% this year, fueled by strong central bank purchases, rising demand for gold-backed Exchange-Traded Funds, a weakening dollar, and growing interest from retail investors seeking protection against rising trade and geopolitical uncertainties.

SPDR Gold Trust, known as the largest gold-backed exchange-traded fund in the world, announced a decrease in its holdings of 0.17%, falling to 1,013.16 metric tons on Monday from 1,014.88 tons on Friday. Elsewhere, spot silver decreased 0.4% to $48.32 per ounce, platinum declined 0.8% to $1,612.85, and palladium slipped 0.3% to $1,315.86.