Gold prices hovered near record highs in Asian trade on Thursday as haven demand remained underpinned by an ongoing U.S. government shutdown and growing conviction in more interest rate cuts. 

The yellow metal hit a series of peaks this week as the U.S. government shut down after Congress failed to pass a spending bill. The shutdown will delay the release of key labor market data this week, leaving markets in the dark over the path of interest rates. 

Spot gold steadied at $3,864.63 an ounce, while gold futures for December fell 0.2% to $3,889.65/oz by 00:45 ET (04:45 GMT). Spot prices hit a record high of $3,895.33 on Wednesday. 

US government shutdown expected to last at least 3 days, payrolls data delayed

The U.S. government is expected to remain shut for at least three days, disrupting several federal operations across the country. Senate lawmakers also appeared to have marked little progress towards reaching consensus on a spending bill.

A prolonged shutdown could hurt the U.S. economy with disruptions in essential services. President Donald Trump’s threats of firing more federal workers also stand to further hurt the labor sector. 

Closely-watched nonfarm payrolls data, which was initially scheduled to be released this Friday, is now expected to be delayed until at least next week.

But private payrolls data released on Wednesday showed a further cooling in the labor market, keeping markets largely optimistic over more interest rate cuts by the Federal Reserve. This notion weighed on the dollar and benefited metal markets.

Other precious metals also cooled on Thursday after a strong performance this week. Spot platinum steadied at $1,563.46/oz, while Spot platinum fell 0.2% to $47.2535/oz. Both metals crested over 10-year highs this week. 

Among industrial metals, benchmark copper futures on the London Metal Exchange rose 0.4% to $10,422.05 a ton, while COMEX copper futures rose 0.4% to $4.9145 a pound. 

Markets see 97% chance of Oct rate cut

Markets are pricing in a 97% chance for a 25 basis point cut by the Fed in late-October, and a 3% chance for a bigger, 50 bps cut, CME Fedwatch showed. 

A slew of recent readings showed the U.S. economy was steadily cooling, with particular weakness in the once strong labor market. The Fed had cut rates by 25 bps in September on concerns over cooling jobs growth.

But a slew of Fed officials warned that sticky inflation could deter the central bank from cutting rates further. PCE price index data– the Fed’s preferred inflation gauge– rose as expected in August, with core inflation remaining above the central bank’s 2% annual target, data showed last week.