Gold extends upside to near $4,200 amid Fed rate cut hopes

• Gold price gains momentum to near $4,195 in Thursday's early Asian session. 
• The House debates the funding bill ahead of the final vote. 
• Fed's Bostic announced he will step down as president of the Atlanta Fed early next year.

Gold price (XAU/USD) extends the rally to around $4,195 during the early Asian session on Thursday. The precious metal rises to the highest level since October 21 ahead of the vote to end the US government shutdown, which would offer economic clarity and set the stage for the Federal Reserve's (Fed) next move. Fed officials are set to speak later in the day, including Neel Kashkari, Alberto Musalem and Beth Hammack. 

The US House of Representatives is in session to debate and vote on the Senate-passed funding deal that would end the longest government shutdown in US history. The Senate has already approved the spending package, backed by a group of Democrats. The bill will restore funding to government agencies through January 30.

Hopes for the end of the US government shutdown and the resumption of economic data could lead the US central bank to cut interest rates next month, according to Reuters. This, in turn, could provide some support to the yellow metal. The markets are now pricing in nearly a 64% possibility that the Federal Reserve (Fed) will cut rates in December, according to the CME FedWatch tool. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal.

Fed policymakers are divided on rate reductions amid inflation concerns. Fed Governor Stephen Miran described US monetary policy as too tight, mainly because he believes cooling housing inflation is easing price pressures. 

Meanwhile, Atlanta Fed President Raphael Bostic said on Wednesday that he favors leaving interest rates where they are until there is "clear evidence" that inflation is moving back to the Fed's 2% target. Bostic announced he will step down as president of the Federal Reserve Bank of Atlanta early next year.

Traders will take more cues from the Fedspeak later on Thursday. Any hawkish remarks from Fed officials could lift the US Dollar (USD) and drag the USD-denominated commodity price lower in the near term.