Gold prices rose to hit a new record high Wednesday, supported by safe-haven demand as the U.S. government shut down most operations, while growing expectations of a Federal Reserve rate cut this month added to the metal's appeal.

Spot gold climbed 0.9% at $3,891.96 per ounce, as of 0844 GMT, after hitting an all-time high of $3,895.09 earlier in the session.

U.S. gold futures for December delivery gained 1.2% to $3,918.60.

The dollar index fell to 0.2% against its peers, its lowest level in over one week, making greenback-priced gold more affordable for overseas buyers.

"The dollar is weakening on the back of expectations of an increasingly dovish Fed. This dynamic has accelerated after a failed attempt to pass a spending bill triggered a government shutdown which could weigh on economic output," said Ricardo Evangelista, senior analyst at ActivTrades.

The U.S. government shut down much of its operations, which could lead to the loss of thousands of federal jobs, as deep partisan divisions prevented Congress and the White House from reaching a funding deal.

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The shutdown could delay the release of key economic data, including the non-farm payrolls (NFP) report due on Friday.

Non-yielding gold, viewed as a safe-haven asset in times of economic and geopolitical uncertainty, thrives in a low-interest-rate environment.

"Most likely the Fed doesn't really need (the NFP) report to make up its mind because U.S. interest rates are still above the neutral rate, so monetary policy is restrictive and if the economy is slowing, you need to get towards the neutral rate at least," said Carsten Menke, an analyst at Julius Baer.

Investors are pricing in a 95% chance of a rate cut this month, per the CME FedWatch Tool.

The ADP national employment report, due later in the day, is expected to offer additional labor market insights.

Elsewhere, spot silver gained 1.5% to $47.39 per ounce, a more than 14-year high. Platinum rose 0.6% to $1,583.75, while palladium was up 0.5% at $1,263.44.