Gold settled nearly 3 percent higher on Wednesday, recouping most of the previous session's tumble, as a drop in the dollar and weak U.S. equities sparked bargain hunting in the precious metal.
Bullion accelerated gains after data showed U.S. private employers added fewer-than-expected jobs in September, according to data from payrolls processor ADP, underscoring steady but still sluggish growth in the labor market.
A partial government shutdown in Washington entered a second day, adding to concerns over how soon a political compromise would be reached. The Congress must also agree to raise the debt limit in coming weeks or risk a default that could roil global markets.
"The market is jittery because of the government shutdown. If the economy numbers continue to be weaker than expected, we may see a slide in the dollar, and money in equities flow back into Treasuries and metals for the time being," said Tom Power, senior commodities trader at futures brokerage R.J. O'Brien.