Gold Prices Surge Amid Weaker Dollar and Lower Yields

Gold prices surged on Wednesday, bolstered by a decline in the U.S. dollar and a dip in Treasury yields, as investors kept a keen eye on upcoming U.S. jobs data for possible implications on the Federal Reserve's monetary policy.

Spot gold rose by 1.8% to $5,111.30 per ounce, while U.S. gold futures for April delivery increased by 2.1% to $5,136.50 per ounce. A weaker dollar, which hit a near two-week low, made dollar-denominated gold more attractive to international buyers. Julius Baer analyst Carsten Menke noted that a declining U.S. dollar had been advantageous for gold prices in recent trading sessions.

In addition, 10-year U.S. Treasury yields fell to a near one-month low following data that showed a decrease in core retail sales and downward adjustments to previous months. This created a more favorable backdrop for holding non-yielding assets such as gold. The Labor Department's nonfarm payrolls report, expected to reveal job creation figures and steady unemployment, could influence interest rate expectations, with investors anticipating a potential slowdown in job growth, possibly prompting the Fed to continue interest rate cuts through 2026.