Gold prices rose by more than 2% on Wednesday, building on their best performance since 2008 in the previous session, driven by bargain-hunting and a declining dollar that supported bullion. Spot gold saw a rise of 2.2%, hitting $5,044.74 per ounce as of 0112, after a substantial increase of 5.9% on Tuesday, marking its largest daily gain since November 2008. Bullion hit an all-time high of $5,594.82 last Thursday. U.S. gold futures for April delivery rose by 2.7%, hitting $5,067.0 per ounce. The dollar saw a drop against most major currencies, except for the yen, on Tuesday.
This movement happened as traders seized the chance to solidify recent profits, influenced by favorable U.S. economic data and expectations of a more hawkish approach from the Federal Reserve. US Dollar A depreciated dollar makes gold priced in dollars more accessible for those using other currencies. On Tuesday, U.S. President Donald Trump signed a spending agreement that brings an end to the partial government shutdown in the United States. The employment report for January, which many have been looking forward to, will not be released this Friday because of the ongoing partial shutdown.
Investors are boosting their positions on higher long-dated Treasury yields and a more defined yield curve, expecting that incoming Federal Reserve Chair Kevin Warsh will support interest rate cuts while also reducing the U.S. central bank’s balance sheet. Market participants expect at least two cuts in Federal Reserve interest rates by 2026 and are eager for the release of ADP private payroll data later today for further insights into the direction of the Fed’s policy. Non-yielding bullion often shows better performance in settings with low interest rates.
The current wave is expected to be significant, likely to rise into the $4,950 to $5,198 range, as noted by technical analyst Wang Tao. Spot silver rose by 2.1% to $86.92 per ounce. It hit an all-time high of $121.64 on Thursday. Spot platinum rose by 2.3% to $2,260.50 per ounce after reaching a high of $2,918.80 on January 26, while palladium increased by nearly 3% to $1,782.85.