Gold gains as U.S. dollar, yields dip after ADP jobs data

Gold rose on Wednesday as the U.S. dollar and Treasury yields declined after a downbeat jobs report, underpinning demand for the safe-haven metal amid simmering tensions between Russia and the West over Ukraine

Spot gold gained 0.4% to $1,808.48 per ounce. U.S. gold futures settled 0.5% higher at $1,810.30

Gold is still hovering above $1,800 and a lot of that has to do with Treasury yields having been “exhausted” and with the dollar still near today’s lows after the private payrolls data, said Edward Moya, senior market analyst at brokerage OANDA

An employment report from ADP showed U.S. private payrolls unexpectedly fell in January, pressuring the dollar and Treasury yields. If gold can continue to stabilize above $1,800, you’ll probably start to see some more investors come back in, Moya added

Bolstering bullion’s appeal, U.S. President Joe Biden approved sending additional forces to eastern Europe over a Russian threat to invade Ukraine

Although gold is considered a hedge against higher inflation and geopolitical risks, interest rate hikes remain a potential headwind since that translates into a higher opportunity cost of holding non-yielding bullion

Investors await European Central Bank and Bank of England meetings on Thursday for cues on the pace of monetary policy tightening in the face of soaring inflation

“Continued short covering and perceived bargain buying” are helping gold and silver prices, said Jim Wyckoff, a senior analyst at Kitco Metals in a note

“A slumping U.S. dollar index and crude oil prices hitting seven-year highs this week are bullish outside market forces for the metals markets,” Wyckoff added

Spot silver fell 0.1% to $22.61 an ounce, platinum advanced 1% to $1,037.59, and palladium rose 0.6% to $2,376.24