NEW YORK: Gold rose on Wednesday as the US dollar and Treasury yields declined after a downbeat jobs report, underpinning demand for the safe-haven metal amid simmering tensions between Russia and the West over Ukraine.
Spot gold gained 0.5% to $1,809.11 per ounce by 12:39 p.m. EST (1739 GMT). U.S. gold futures rose 0.5% to $1,810.50.
Gold is still hovering above $1,800 and a lot of that has to do with Treasury yields having been “exhausted” and with the dollar still near today’s lows after the private payrolls data, said Edward Moya, senior market analyst at brokerage OANDA.
An employment report from ADP showed U.S. private payrolls unexpectedly fell in January, pressuring the dollar and Treasury yields.
If gold can continue to stabilize above $1,800, some more investors will probably start to come back in, Moya added.
Bolstering bullion’s appeal, U.S. President Joe Biden approved sending additional forces to eastern Europe over a Russian threat to invade Ukraine.
Although gold is considered a hedge against higher inflation and geopolitical risks, interest rate hikes remain a potential headwind since that translates into a higher opportunity cost of holding non-yielding bullion.
Investors await European Central Bank and Bank of England meetings on Thursday for cues on the pace of monetary policy tightening in the face of soaring inflation.
“Continued short covering and perceived bargain buying” are helping gold and silver prices, Jim Wyckoff, a senior analyst at Kitco Metals, said in a note.
“A slumping U.S. dollar index and crude oil prices hitting seven-year highs this week are bullish outside market forces for the metals markets,” Wyckoff added.
Spot silver rose 0.4% to $22.73 an ounce, platinum advanced 1.3% to $1,040.42, and palladium rose 0.6% to $2,377.54.
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