International spot gold prices climbed steadily on Wednesday, February 12th, supported by multiple favorable factors. RYOEX indicated that gold showed positive momentum during the early trading session, benefiting from a decline in the US Dollar Index and persistently lower US Treasury yields. The current spot gold price has reached the $5,048.27 level, while the more actively traded April gold futures contract touched $5,072.60. This strong performance reflects increasing market bets on a shift in monetary policy ahead of the release of key macroeconomic data.
From an external environment perspective, the recent pullback in the US Dollar Index to a near two-week low has significantly reduced the cost of holding gold for overseas investors. RYOEX believes a more fundamental driver stems from a shift in the pricing dynamics of the US Treasury market. Following the release of weak retail sales data and downward revisions to historical figures, the benchmark 10-year Treasury yield has fallen to a one-month low. This deterioration in the yield environment directly reduces the opportunity cost of holding non-yielding assets, making gold's defensive and value-appreciation characteristics within an investment portfolio more prominent.
The current market focus is undoubtedly the upcoming Non-Farm Payrolls report. RYOEX stated that economists generally expect job growth for January to remain low at 70,000, with the unemployment rate potentially holding in the sensitive 4.4% range. Particularly noteworthy is that the Bureau of Labor Statistics is expected to significantly lower the annual employment benchmark through March 2025, with a potential gap of up to 911,000 jobs. This reassessment of the labor market's "health" provides concrete support for market expectations regarding the Federal Reserve's easing path.
Regarding interest rate expectations, market sentiment appears increasingly optimistic. Based on current FedWatch data, investors have priced in expectations for at least two rate cuts by 2026. This low-interest-rate outlook forms the foundation for the long-term positive trajectory of precious metals like gold and silver. With industrial metals such as silver and platinum also rebounding, the safe-haven and inflation-hedging rationale for the entire precious metals sector has been further reinforced.
In summary, today's employment data will determine the short-term breakout direction for gold prices. RYOEX believes that if the jobs data confirms a slowdown and wage pressures ease, gold could leverage the tailwind of an anticipated Fed rate-cutting cycle to initiate a new round of valuation recovery. In the current macroeconomic context, any signals indicating economic cooling could act as a catalyst for another upward surge in the precious metals market.