Gold and silver prices advanced during Asian trading on Wednesday after softer-than-expected U.S. retail sales data fueled expectations that economic momentum in the world’s largest economy may be easing. Investors are now looking to upcoming payrolls figures for clearer signals on the outlook.
Although precious metals have posted gains so far this week, price action remains choppy following a sharp pullback from record highs reached in late January. Despite recent weakness in the U.S. dollar and softer macroeconomic readings, the rebound in bullion has been limited. Ongoing geopolitical uncertainty in the Middle East has also done little to meaningfully lift haven demand.
Spot gold climbed 0.6% to $5,052.11 per ounce, while April gold futures rose 0.9% to $5,076.40 as of 01:02 ET (06:02 GMT). Even so, spot prices remain roughly $600 below their recent peak levels.
Silver followed suit, with spot prices up 1.7% to $82.1375 per ounce. Platinum also gained, rising 2.1% to $2,130.63 per ounce.
Dollar weakness supports metals after retail sales miss
Precious metals had dipped modestly on Tuesday before rebounding as December U.S. retail sales came in below expectations.
Analysts at ANZ said gold’s prior rally had paused amid concerns that prices had “run too hard, too fast.”
“With speculative positioning now largely washed out of the market, traders are looking for the next catalyst for another run higher. Weak economic data in the US prompted some buying,” ANZ analysts added.
The retail sales report suggested that consumer spending in the U.S. is losing momentum, as inflation remains sticky and labor market pressures persist. Prolonged softness in spending could weigh on broader economic prospects.
A cooling growth outlook may encourage the Federal Reserve to consider additional rate cuts later this year to support activity. On this view, U.S. Treasury yields declined, while the dollar struggled to recover from sharp losses recorded earlier in the week.
The dollar index slipped a further 0.2% during Asian trading on Wednesday, extending its recent downward trend.
Payrolls and CPI data awaited
Markets are now awaiting the release of U.S. nonfarm payrolls data later Wednesday, which could provide more concrete insight into labor market conditions. Evidence of sustained weakness would likely strengthen expectations for monetary easing.
Lower interest rates generally support gold and other non-yielding assets by reducing the opportunity cost of holding them.
However, uncertainty over the direction of U.S. policy remains elevated, particularly after President Donald Trump nominated Kevin Warsh to serve as the next Federal Reserve chair.
Warsh is widely regarded as less dovish, a perception that has weighed on metals markets since late January.
Beyond payrolls, investors are also focused on Friday’s consumer price index report. Employment trends and inflation remain the Federal Reserve’s two primary considerations when setting interest rates.