Gold gains $16 as bond yields retreat

Gold prices advanced at the close of trading today, March 9, amid signs that the labor market of the world’s largest economy — the US — is cooling from last year’s red-hot peak.

The uptick in the yellow metal prices was fueled by a pullback in US Treasury yields. The two-year benchmark yield fell below 4.9%, after exceeding 5% this week for the first time since 2007.

Today's data revealed that US initial jobless claims climbed to the highest level since December 2022, with 211,000 applications registered in the week ended March 4.

In prepared testimony to a Senate panel on March 7-8, Fed Chair Jerome Powell said policymakers may up the size of its interest rate hikes and borrowing costs to higher-than-expected levels if data kept showing a robust economy and chronic inflation.

Powell’s remarks imply that Fed officials will project a higher endpoint for the central bank's benchmark overnight interest rate at the upcoming March 21-22 meeting, with market forecasts suggesting a 50-basis-point rise.

Gold for April delivery closed with a gain of 0.9%, or $16, to $1,834.60 an ounce.

Meanwhile, the US dollar index, which gauges the greenback's strength against a basket of six currencies, plunged by 0.50% to 105.16 points at 10:00 pm Makkah time.