Gold prices extended their gains past $4,200 heading into the weekend, a record previously touched on October 21 ahead of a vote to end the US government shutdown and the Fed's next monetary policy move.
At 9.20am, gold was at $4,186, down 0.23% since it opened in early trading Thursday in Asia.
The US House of Representatives is currently in session to debate and vote on a funding deal passed by the Senate, aimed at ending the longest government shutdown in the country's history.
The spending package has received the support of a Democratic majority in the Senate and will restore funding to federal government agencies until January 30.
Hopes for an end to the US government shutdown and the resumption of economic data are expected to increase the likelihood that the US central bank will cut interest rates next month.
The market is now pricing in a nearly 64% chance that the Fed will cut interest rates in December, according to the CME FedWatch tool. Lower interest rates typically reduce the opportunity cost of holding gold, supporting demand for the precious metal.
However, Fed policymakers are divided on the need for a rate cut, amid concerns about inflationary pressures.
Fed Governor Stephen Miran believes that US monetary policy is currently too tight, while stressing that a decline in housing inflation should have eased overall price pressures.
Atlanta Fed President Raphael Bostic, on the other hand, has said he is more inclined to keep interest rates at current levels until there is clear evidence that inflation is indeed moving towards its 2% target.
Traders are now looking ahead to speeches by several Fed officials on Thursday for further clues on the direction of monetary policy. Any hawkish statements could strengthen the US Dollar (USD) and weigh on dollar-denominated commodities in the near term.
