Gold Prices Surge Amid Weaker Dollar and Lower Treasury Yields

Gold prices increased on Wednesday due to a weaker dollar and declining Treasury yields while investors awaited crucial U.S. jobs data. The weaker dollar made gold more affordable for overseas buyers, and the decrease in Treasury yields reduced the opportunity cost of holding gold, a non-yielding asset.

Gold prices saw an upswing on Wednesday, fueled by a weaker U.S. dollar and falling Treasury yields, as investors prepared for significant U.S. jobs data later in the day. Spot gold rose by 1%, reaching $5,074.39 per ounce, while U.S. gold futures for April delivery increased by 1.3% to $5,098 per ounce.

The weakened dollar, hitting a near two-week low, enhanced gold's attractiveness for overseas buyers. In parallel, a drop in the benchmark 10-year U.S. Treasury yields to a near monthly low further supported gold by reducing the opportunity cost of maintaining non-yielding assets. This was spurred by recent U.S. retail sales data exhibiting a decline.

Anticipation of slower U.S. job growth could spur further Federal Reserve interest rate cuts, according to analysts. Investors forecast at least two rate cuts by 2026, promoting bullion growth in a low-interest environment. Meanwhile, prices of other precious metals like silver, platinum, and palladium also experienced considerable gains.