Gold Dips Slightly as Dollar Hits Four-Month Low Amid Weak U.S. Employment Data
Gold prices edged lower on Wednesday, even as the U.S. dollar dropped to its lowest level in four months. The latest ADP report revealed a sharp decline in private-sector hiring in the U.S., reinforcing concerns about a slowing economy.
April gold futures were last seen down $11.70, trading at $2,908.90 per ounce.
Meanwhile, the ICE U.S. Dollar Index fell by 1.05 points to 104.7, marking its lowest level since November 5. The ADP report showed that only 77,000 new jobs were created in February, significantly below January’s 186,000 and well under analysts’ expectations of 142,500.
Economic Uncertainty and Trade Tensions
In addition to weak employment data, the U.S. economy faces mounting trade challenges. President Donald Trump has imposed 25% tariffs on imports from Canada and Mexico while doubling tariffs on Chinese goods to 20%. Canada and China have already responded with retaliatory measures, while Mexico is expected to announce its response on Sunday.
Analysts warn that the escalating trade war could slow global growth and drive up inflation in the U.S., potentially delaying interest rate cuts by the Federal Reserve.
Impact on Bond Markets and Future Gold Trends
Bond yields declined as investors sought safe-haven assets. The yield on the U.S. two-year Treasury note dropped to 3.918%, while the 10-year yield fell to 4.203%.
Despite its slight dip, gold remains supported by a weakening dollar, increased central bank purchases, and growing concerns over stagflation in the U.S.