By: Economy Middle east

Gold and silver prices rose on Wednesday as U.S. Treasury bond yields declined following data that showed stagnant retail sales for December. This stall in consumer spending signals a softening economy, leading investors to anticipate a more accommodative stance from the Federal Reserve. Lower yields reduce the opportunity cost of holding non-yielding assets, making precious metals more attractive. Spot gold climbed 1.08 percent to $5,062.83 per ounce, while U.S. gold futures for April delivery gained 1.1 percent to reach $5,086.29. Silver also saw a strong recovery, jumping 2.38 percent to $82.64 per ounce after a sharp decline in the previous session.

Impact of U.S. retail sales data

According to the Commerce Department, U.S. retail sales were unchanged in December, missing economist expectations of a 0.4 percent increase. Households scaled back spending on motor vehicles and other big-ticket items, potentially setting the economy on a slower growth path for the start of 2026. This data has heightened the focus on today’s upcoming non-farm payrolls report for January and Friday’s inflation data, as traders look for further cues on the Fed’s interest rate trajectory.

UAE gold rates surge

Mirroring the international upward trend, local gold rates in the UAE saw a notable increase across all variants. The price for 24-carat gold climbed by AED3.50 to reach AED608.25, while 22-carat gold rose by AED3.25 to settle at AED563.25. This momentum extended to other categories as well, with 21K gold gaining AED3.00 to hit AED540.00, 18K gold increasing by AED2.25 to reach AED462.75, and 14K gold rising by AED2.00 to settle at AED361.00.

Fed outlook and interest rates

Despite the soft retail data, Federal Reserve Bank of Cleveland President Beth Hammack stated on Tuesday that the central bank faces “no urgency” to adjust interest rates this year, maintaining a “cautiously optimistic” outlook. However, investor sentiment—as tracked by FedWatch—continues to price in at least two 25-basis-point rate cuts in 2026, with the first likely occurring in June. Non-yielding bullion historically performs well in such low-interest-rate environments, as the broader market prepares for potential policy shifts.

Performance of other precious metals

Other metals in the precious complex also benefited from the weaker dollar and lower yields. Spot platinum rose 2.3 percent to $2,133.00 per ounce, while palladium added 2.13 percent to reach $1,727.00. The broad-based rally underscores a shift back toward defensive assets as macroeconomic uncertainty persists.