Gold and silver prices rise as dollar weakens; analysts point to Fed rate cuts
Gold and silver prices climbed as a weaker US dollar and falling Treasury yields made bullion more attractive. Expectations of slower US economic growth and possible Federal Reserve rate cuts are supporting demand. Investors are closely watching nonfarm payrolls and retail data, which could influence interest rate decisions and short-term trends in precious metals like platinum and palladium.
Prices rise
Spot gold traded above $5,048 per ounce, while US gold futures for April delivery reached $5,072.60. Silver jumped 3.4% to $83.40 per ounce after falling sharply in the previous session. Other metals also gained, with platinum rising 2.8% to $2,146.07 per ounce and palladium up 2.6% to $1,751.79 per ounce. Analysts say the weaker US dollar has made gold and silver cheaper for international buyers. Lower Treasury yields also reduce the cost of holding non-yielding assets like gold and silver, making them more attractive to investors.
What data says
Recent data shows that US core retail sales fell in December, and previous months’ figures were revised downwards. These signs of slower economic growth have increased expectations of Federal Reserve interest rate cuts in 2026. According to the CME FedWatch tool, traders now expect at least two rate cuts this year. Investors are also watching the US nonfarm payrolls report. Economists expect around 70,000 new jobs in January, compared with 50,000 in December. The unemployment rate is expected to remain at 4.4%, and wage growth may slow. A weaker job report could push the Federal Reserve to lower rates further, which usually supports gold and silver prices.
Analysts' say
Carsten Menke of Julius Baer said the weaker dollar in recent sessions has helped lift gold prices. Giovanni Staunovo of UBS noted that slower job growth could allow the Federal Reserve to continue cutting interest rates. Analysts say that bullion performs well in a low-interest-rate environment because it does not offer yield, and lower rates reduce the cost of holding it.
Advice for investors
Investors should track the US dollar, Treasury yields, and economic indicators, particularly nonfarm payrolls. These factors can affect short-term price trends in gold, silver, and other metals. Analysts advise considering risk tolerance and long-term strategy before investing in precious metals.