Updates for US mid-session trading

By Sherin Elizabeth Varghese

Oct 15 (Reuters) - Gold prices breached $4,200 per ounce for the first time on Wednesday, extending a record rally as rising interest rate cut bets and geopolitical jitters send investors flocking to the safe-haven metal.

Spot gold XAU= rose 1.6% to $4,206.59 per ounce as of 10:19 a.m. ET (1419 GMT), after hitting an all-time high of $4,217.95 earlier. U.S. gold futures GCcv1 for December delivery gained 1.4% to $4,222.30.

"The metal has been on a tear, and it doesn't look like it wants to stop... With U.S.-China trade tensions being reignited in the last few days, investors have even more reason to hedge their long equity bets by diversifying into gold," said Fawad Razaqzada, market analyst at City Index and FOREX.com.

Gold has surged over 60% this year, driven by a confluence of factors including geopolitical tensions, rate-cut bets, central bank buying, de-dollarisation and strong ETF inflows.

"With the $5,000 handle now just $800 away, I wouldn't bet against gold getting there eventually," Razaqzada said, adding that a short-term correction is likely to shake out weaker hands and attract fresh dip buyers.

The dollar slipped against a basket of peers after Federal Reserve Chair Jerome Powell struck a dovish tone on Tuesday, saying the U.S. labour market remained mired in "low-hiring, low-firing doldrums." USD/

Gold is considered a traditional hedge against uncertainty and inflation, and also thrives in low-rate environments as it is a non-yielding asset.

Traders are pricing in a 25-basis-point rate cut in October with a 98% probability, followed by another cut in December, which is fully priced in at 100%. FEDWATCH.

Adding to the safe-haven bid, U.S. President Donald Trump said Washington was considering cutting some trade ties with China after both sides imposed tit-for-tat port fees this week.

Markets are also watching the U.S. government shutdown, which has halted official data and may cloud policymakers' outlook abroad.

Silver XAG= climbed 2.4% to $52.69, following Tuesday's record high of $53.6.

Silver's surge is driven by a tight London supply, marked by extreme backwardation and record lease rates, but it could reverse quickly if shortages ease, Michael Brown, senior strategist at Pepperstone, said.

Elsewhere, platinum XPT= climbed 1.2% to $1,657.45 and palladium XPD= rose 1% to $1,541.50.

(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Mrigank Dhaniwala)

((sherinelizabeth.varghese@thomsonreuters.com;))