Berliner Boersenzeitung - Gold hits record, Wall St futures drop as US heads for shutdown

The prospect of federal services being closed overshadowed optimism the Federal Reserve will cut interest rates again, with the crisis possibly causing the postponement of key data used by the bank to decide on policy.

Democrats and Republicans have been unable to bridge their differences on funding the government beyond Tuesday -- the end of the fiscal year -- with both sides blaming each other.

Senate Republicans tried to rubber-stamp a House-passed temporary funding patch -- but could not get the handful of Democratic votes required to send it to Donald Trump to sign off.

Democrats want to see hundreds of billions of dollars in healthcare spending for low-income households restored, which the Trump administration is likely to eliminate.

"We'll probably have a shutdown," the Republican president told reporters before the vote.

The closure will see non-essential operations grind to a halt, leaving hundreds of thousands of civil servants temporarily without pay, and payment of many social safety net benefits potentially disrupted.

Trump threatened to punish Democrats and their voters during any stoppage by targeting progressive priorities and forcing mass public sector job cuts.

"So we'd be laying off a lot of people that are going to be very affected," he said

"And they're Democrats, they're going to be Democrats," he told an event at the White House, adding that he would use the pause to "get rid of a lot of things we didn't want, and they'd be Democrat things".

While most shutdowns end after a short period with little effect on markets, investors remain concerned, particularly as it could prevent the release Friday of the key non-farm payrolls report -- a crucial guide for the Fed on rate decisions.

"Without (the report), the Fed would be forced to navigate October's decision by starlight rather than compass, relying on smaller surveys and anecdotal signals," wrote Stephen Innes at SPI Asset Management.

"The October cut looks assured... but beyond that, the path becomes guesswork. Traders hate nothing more than an information vacuum. In its absence, every tick of secondary data looms larger than it should, amplifying volatility."

Gold, a go-to in times of turmoil and uncertainty, hit a new peak of $3,875.53 amid worries about the impact of the shutdown as well as a weaker dollar and bets on lower borrowing costs.

Futures on all three main indexes in New York were in the red -- with the Dow coming off a record.

However, Asian equities held up, with Singapore, Seoul, Wellington, Taipei, Manila, Mumbai, Bangkok and Jakarta all up.

Tokyo and Sydney were the only losers.

Hong Kong and Shanghai were closed for holidays.

In company news, Australian mining titan BHP fell around 1.8 percent following reports that China's state-run iron ore buyer told steelmakers to temporarily stop buying seagoing, dollar-denominated cargoes from the firm, as part of a pricing dispute.

Australian Prime Minister Anthony Albanese called the move "disappointing".

- Key figures at around 0415 GMT -

Tokyo - Nikkei 225: DOWN 1.0 percent at 44,498.06

Hong Kong - Hang Seng Index: Closed for a holiday

Shanghai - Composite: Closed for a holiday

Euro/dollar: UP at $1.1741 from $1.1739 on Tuesday

Pound/dollar: DOWN at $1.3444 from $1.3448

Dollar/yen: UP at 147.95 yen from 147.86 yen

Euro/pound: UP at 87.33 pence from 87.29 pence

West Texas Intermediate: UP 0.2 percent at $62.52 per barrel

Brent North Sea Crude: UP 0.3 percent at $66.20 per barrel

New York - Dow: UP 0.2 percent at 46,397.89 (close)

London - FTSE 100: UP 0.5 percent at 9,350.43 (close)

(U.Gruber--BBZ)