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Gold price (XAU/USD) extends its upside to around $4,365 during the early Asian session on Friday. The precious metal holds positive ground after reaching a record high of $4,380 in the previous session. A fear of a prolonged US government shutdown, growing bets of additional US interest rate cuts, and US-China trade tensions support the yellow metal. Traders will keep an eye on the Fedspeak later on Friday for fresh impetus. 

There are also growing worries about the ongoing US government shutdown, which weighs on the US Dollar (USD) and underpins the USD-denominated commodity price. The federal shutdown has entered its third week after the Senate failed to advance legislation that would restore funding. US Treasury official said that a US government shutdown could cost the US economy up to $15 billion a week in lost output.

Rate cut bets by the US Federal Reserve (Fed) also fuel the momentum. Fed’s Powell said on Tuesday that a sharp slowdown in hiring poses a growing risk to the US economy, suggesting that the US central bank will likely cut its key interest rate twice more this year.  

Additionally, Fed Governor Christopher Waller noted that he is on board with another interest rate reduction at the Fed's policy meeting later this month, citing the mixed readings on the state of the job market. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal. 

Brewing US-China trade tensions contribute to the yellow metal’s upside. US President Donald Trump said Washington was considering cutting some trade ties with China after both countries began imposing additional port fees on ships carrying cargo.

On the other hand, easing concerns over geopolitical risks could undermine the safe-haven assets like Gold. Trump said late Thursday that he and Russian President Vladimir Putin agreed to another summit to discuss ending the war in Ukraine, one day before Trump was due to speak with Ukrainian leader Volodymyr Zelenskiy, per Bloomberg.

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