Gold and Silver Prices Rise as Falling U.S. Yields Signal Softer Economy Ahead of Key Jobs Data

Gold and silver prices moved higher on Wednesday as declining U.S. Treasury bond yields boosted demand for precious metals, following economic data that pointed to a cooling U.S. economy. Investors closely watched the market after December retail sales data showed growth had stalled, raising concerns about slower consumer spending and its impact on future economic momentum.

Spot gold prices edged up around 0.3% to approximately $5,038 per ounce in early Asian trading, while U.S. gold futures for April delivery climbed about 0.6% to near $5,061 per ounce. Silver prices also rebounded strongly, with spot silver gaining around 1% to trade near $81.50 per ounce after suffering sharp losses in the previous session. The rise in precious metals came as U.S. bond yields declined, reducing the opportunity cost of holding non-yielding assets like gold and silver.

The drop in yields followed a series of U.S. economic indicators suggesting the economy may be losing some steam. U.S. retail sales were unexpectedly flat in December, as households cut back on spending on vehicles and other high-value items. This slowdown in consumer demand has strengthened expectations that overall economic growth could moderate in the months ahead. Lower yields typically support precious metal prices, especially when paired with signals of economic uncertainty.

Despite the softer data, Federal Reserve officials remain cautious. Cleveland Fed President Beth Hammack noted that there is no immediate urgency to adjust interest rates, citing a cautiously optimistic outlook for economic activity. Still, market participants are pricing in at least two interest rate cuts in 2026, with the first potentially arriving as early as June, a scenario that generally favors gold and silver prices.

Investors are now focused on key upcoming economic releases, including the U.S. non-farm payrolls report and unemployment data, along with inflation figures later in the week, for further clues on the Federal Reserve’s policy direction. Meanwhile, global demand for gold remains strong, with Indian investors increasing allocations to gold exchange-traded funds amid rising geopolitical risks.

Other precious metals also saw gains, with platinum and palladium posting modest advances, reflecting broader strength across the metals market as investors seek safe-haven assets.