According to Kitco, information related to consumer and labor markets has prompted cash flow to turn to precious metals as a safe haven channel.
According to the latest report from the US Department of Commerce released on March 7, the country's retail sales in January fell 0.2% after remaining flat in December. This decrease, although still reflecting a weakening of consumption, is lower than analysts' forecasts, which expected retail sales to fall by up to 0.3%.
Year-on-year, US retail sales still increased by 3.2%, significantly higher than the forecast of 2% and also exceeded the 2.4% increase of December. Meanwhile, core retail sales - excluding cars - remained at 0%, as market forecasts.
Immediately after the data was released, spot gold prices immediately increased sharply and approached the highest level of the day. On the international market, spot gold prices at times reached about 5,124 USD/ounce, up 0.84% compared to the previous session.
Experts believe that the positive response of the gold market comes not only from retail sales data but also strongly affected by the disappointing US jobs report.
On the same day, the US Bureau of Labor Statistics released a report showing that the country's economy lost 92,000 jobs in February. This figure is completely contrary to previous forecasts by economists, who expected the labor market to create about 58,000 jobs.
Not only that, the US unemployment rate also increased to 4.4% in February, higher than the 4.3% of the previous month and exceeding the market's unchanged forecast.
These negative data raise concerns that the US labor market is slowing down faster than expected. This means that the US Federal Reserve (Fed) may have to cut interest rates early and more strongly in the second half of the year to support the economy.
Besides the disappointing February figures, the report also showed that previous job data had been significantly reduced. Specifically, the number of jobs in December was adjusted from an increase of 65,000 to a decrease of 17,000 jobs. Meanwhile, January figures were also lowered from 130,000 to 126,000 jobs.
However, wages in the US still maintained their upward momentum. Average hourly income in February increased by 0.4%, reaching $37.32/hour, higher than the forecast increase of 0.3%. In the past 12 months, wages have increased by about 3.8%.
According to Mr. Jeffrey Roach - chief economist of LPL Financial, the US labor market is showing signs of stagnation after a period of weak growth in 2025. He believes that if the situation continues to worsen faster than expected, the Fed may have to consider lowering interest rates sooner.
In the context of reduced interest rate prospects and the US economy showing signs of weakening, gold continued to benefit as investors turned to safe assets, thereby boosting the price of precious metals to increase sharply in the recent trading session.
