Gold prices gained on Wednesday, buoyed by a weaker dollar and lower Treasury yields, while investors awaited key U.S. jobs data later in the day for clues on the Federal Reserve's policy outlook.

Spot silver rose 5.84% to $85.57 per ounce; spot gold rose 1.44% to 5,097.78 per ounce.

"We’ve seen a bit of a weaker U.S. dollar during the past trading days, which has helped gold and is likely lifting the price today," said Julius Baer analyst Carsten Menke.

The U.S. dollar fell to a near two-week low, making greenback-priced gold more affordable for overseas buyers.

Additionally, the benchmark 10-year U.S. Treasury yields fell to a near one-month low after data showed a dip in core U.S. retail sales in December and downward revisions to November and October figures.

Lower U.S. yields reduce the opportunity cost of holding non‑yielding assets such as gold.

The Labor Department's closely watched nonfarm payrolls report later today is expected to show a likely 70,000 increase in jobs last month after 50,000 were added in December, a Reuters survey of economists showed.

It is also expected to show the unemployment rate steady at 4.4% last month and annual wage growth cooling.

The Bureau of Labor Statistics is expected to revise its annual benchmark, likely showing that the economy created 911,000 fewer jobs in the 12 months through March 2025 than previously estimated.

"Expectation of a slowdown in job additions in the U.S. – to be confirmed later today - is supporting the case that Fed can continue to cut interest rates this year," said UBS analyst Giovanni Staunovo.

Investors expect at least two 25-basis-point rate cuts in 2026, according to CME Group's FedWatch tool. Bullion tends to thrive in a low-interest-rate environment, as it is a non-yielding asset.