Fundamentals

Spot gold edged 0.3% higher to US$5,038.73 per ounce by 12.59am.

US gold futures for April delivery gained 0.6% to US$5,060.60 per ounce.

Spot silver was up 1% at US$81.49/oz, after falling more than 3% in the previous session.

US yields fell yesterday after a raft of data suggested the economy may be softening, giving the US Federal Reserve more cushion to cut interest rates.

Falling yields reduce the cost of holding metals and often come with macro signals that favour them.

US retail sales were unexpectedly unchanged in December as households scaled back spending on motor vehicles and other big-ticket items, potentially setting consumer spending and the economy on a slower growth path heading into the new year.

Federal Reserve Bank of Cleveland president Beth Hammack, however, said on yesterday that the US central bank faces no urgency to change the setting of interest rates this year amid a “cautiously optimistic” outlook for economic activity.

Investors expect at least two 25-basis-point rate cuts in 2026, with the first one expected in June.

Non-yielding bullion tends to do well in low-interest-rate environments.

Investors await the non-farm payrolls report for January, due later in the day, and inflation data on Friday for more cues on the Fed’s monetary policy path.

Indian investors piled into gold exchange-traded funds in January as prices soared amid rising geopolitical risks, surpassing flows into equity funds for the first time, industry data showed yesterday.