Business

Gold and silver prices saw an increase on Wednesday as the U.S. dollar and Treasury bond yields dropped. This change followed reports showing that retail sales growth in December had stalled, indicating a slowing economy ahead of important jobs data to be released later in the day. By 0648 GMT, spot gold was up 0.7% at $5,056.82 per ounce, while U.S. gold futures for April delivery rose by 1% to $5,080.90 per ounce. Spot silver increased by 2.2% to $82.44 per ounce, rebounding after a decline of over 3% in the previous session. Kyle Rodda, a senior market analyst at Capital.com, stated, “Lower yields are clearly helping gold today... After the disappointing retail sales data, it seems likely that the need for further and deeper rate cuts might come sooner than expected.” U.S. yields fell to near their lowest point in a month following several data reports suggesting the economy may be slowing down. This gives the U.S. Federal Reserve more flexibility to lower interest rates. Reduced U.S. yields make it less costly to hold non-yielding assets like gold. Investors are anticipating at least two rate cuts of 25 basis points each in 2026, with the first expected in June. They are also waiting for the non-farm payrolls report for January, which is set to be released later in the day. A Reuters survey of economists predicts an increase of about 70,000 jobs last month, following the addition of 50,000 jobs in December. Tim Waterer, chief analyst at KCM, noted, “Gold or the dollar may not show strong movements until after the NFP release, as the U.S. jobs data will likely influence the Fed’s interest rate path. Any weakness in January's jobs data could support gold's recovery efforts.” On Wednesday, the U.S. dollar slipped to a near two-week low, making metals priced in dollars more affordable for international buyers.