Gold prices have risen as signs of a slowing US economy increase demand for safe-haven assets. Recent data showing weaker-than-expected job growth, declining manufacturing activity, and softer consumer spending have heightened concerns about economic momentum. In uncertain environments, investors often turn to precious metals like gold, which are viewed as stable stores of value during periods of volatility.
The latest figures indicate that nonfarm payrolls expanded by a smaller margin than forecast, while inflation-adjusted retail sales dipped, suggesting reduced household spending. These developments have reinforced expectations that the Federal Reserve may adopt a more accommodative monetary stance, including potential rate cuts in the coming months. Lower interest rates tend to reduce the opportunity cost of holding non-yielding assets such as bullion, making gold more attractive.
Additionally, bond yields have retreated, further supporting gold’s appeal. With 10-year Treasury yields falling, the relative attractiveness of interest-bearing securities diminishes, prompting a shift toward alternative investments. Market analysts note that gold has outperformed many traditional asset classes in recent weeks, reflecting growing risk aversion.
Geopolitical tensions and ongoing fiscal deficits also contribute to investor caution. Although global conflicts remain contained, the persistence of elevated government debt levels in major economies adds to long-term financial uncertainty. In this context, gold continues to serve as a hedge against both macroeconomic instability and currency depreciation.
ETF holdings of gold have seen a modest uptick, signaling renewed institutional interest. Meanwhile, central banks, particularly in emerging markets, have maintained steady purchases, underscoring confidence in the metal’s role as a reserve asset.
While short-term price movements may fluctuate with sentiment, the broader trend suggests that gold is regaining prominence in diversified portfolios amid a backdrop of economic softness and monetary policy shifts.
— news from Bloomberg.com
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Gold Advances With Weakening US Economy Aiding Haven Demand – Bloomberg.com
Gold Advances With Weakening US Economy Aiding Haven Demand Bloomberg.com