Nov 5 (Reuters) - Gold prices gained more than 1% on Wednesday, with a slight U.S. dollar pullback and wider risk-off sentiment driving demand.
Spot gold was up 0.8% at $3,963.03 per ounce at 1203 GMT. U.S. gold futures for December delivery were up 0.3% to $3,971.90 per ounce. Gold prices have gained about 52% this year, reaching an all-time peak of $4,381.21 on October 20.
"The recent shift to more of a risk-off mood in financial markets due to growing concerns about equity market valuations is helping gold stabilise following its retreat from record levels," said Julius Baer analyst Carsten Menke.
DOLLAR PAUSE PROVIDES SUPPORT
European shares hit a two-week low as heady equity valuations continued to make investors nervous globally.
The dollar index (.DXY), meanwhile, eased 0.1% after hitting a more than three-month high, making gold less expensive for other currency holders.
As the U.S. government shutdown moves towards becoming the longest ever, investors are focusing on non-official economic reports, including the ADP National Employment Report due later on Wednesday for cues on the U.S. interest rate path.
The U.S. Federal Reserve cut rates last week and Chair Jerome Powell signalled it might be the last reduction in borrowing costs for the year.
Market participants now see a 72% chance of a rate cut in December, down from over 90% before Powell's remarks, CME's FedWatch Tool showed.
Non-yielding gold tends to do well in a low-interest-rate environment and during times of economic uncertainty.
"We still see sound demand from safe-haven seekers for physical gold, as is the case from emerging market central banks," Julius Baer's Menke said.
Elsewhere, spot silver gained 0.9% to $47.53 per ounce, platinum fell 0.3% to $1,531.69 and palladium climbed 0.5% to $1,397.93.
Reporting by Brijesh Patel in Bengaluru. Editing by Ros Russell and Mark Potter
