Gold hits record high near $3,900

Gold prices are on track for their best monthly performance in 14 years.

Gold prices surged to a new all-time high and are on track for their best monthly performance in 14 years, as growing fears of a potential US government shutdown and rising expectations of interest rate cuts boosted demand for the safe-haven metal.

On Tuesday, December gold futures rose more than 1%, or $41.1, to $3,896.4 an ounce after touching $3,898, the highest level ever for the most active contract during a session.

Spot gold gained 0.9%, or $34.95, to $3,868.5 an ounce at 8:29 a.m. Mecca time, also marking a record high.

The dollar index, which measures the US currency against a basket of six major peers, was steady at 97.88 points.

December silver futures added 0.65% to $47.33 an ounce. Spot platinum edged up 0.1% to $1,605.23, while spot palladium climbed 0.5% to $1,275.21.

Gold prices have risen 12.1% so far in September and are on course for their strongest monthly gain since August 2011 if the current momentum continues, Reuters reported.

The rally came after the US Department of Labor said on Monday that its statistics agency would suspend the release of economic data, including the closely watched monthly jobs report, in the event of a partial government shutdown.