Gold and Silver Prices Rise on Softer Dollar: What This Means for Investors and Businesses in Oman
Gold and silver prices continued to rise on Monday, with gold trading just above $5,000 per ounce as the U.S. dollar weakened. Investors are closely watching upcoming U.S. employment and inflation reports later this week to better understand the future course of interest rates.
Spot gold increased by 0.9% to $5,004.61 per ounce by 0748 GMT, following a 4% surge on Friday. Meanwhile, U.S. gold futures for April delivery rose 1% to $5,026.30 per ounce.
Kelvin Wong, senior market analyst at OANDA, attributed the price gains to a short-term inverse relationship between the dollar and precious metals like gold and silver.
The U.S. dollar fell to its lowest level since February 4, making dollar-priced metals cheaper for international buyers. The Japanese yen also strengthened after Prime Minister Sanae Takaichi’s decisive election victory over the weekend.
KCM chief analyst Tim Waterer noted that bargain-hunting helped push gold above the $5,000 mark.
Market participants are awaiting critical monthly employment and consumer price reports due this week. They expect at least two interest rate cuts of 25 basis points each in 2026, with the first likely in June. Historically, non-yielding assets like gold perform well in low-interest-rate environments.
Waterer added that weaker-than-expected jobs data could support gold’s recovery, although he does not anticipate Federal Reserve rate cuts before mid-year unless there is a significant deterioration in employment figures.
Adding to this outlook, San Francisco Federal Reserve President Mary Daly commented on Friday that one or two additional rate cuts may be necessary to address labor market weaknesses.
Silver also saw gains, with spot prices climbing 3.7% to $80.89 per ounce following a nearly 10% rise in the previous session. However, silver remains well below its all-time high of $121.64 reached on January 29. Wong cautioned that unless silver breaks through the key resistance level of $92.24, the probability of a sustained uptrend remains uncertain.
In contrast, spot platinum declined 0.7% to $2,081.23 per ounce, while palladium prices fell 0.3% to $1,707.31.
Special Analysis by Omanet | Navigate Oman’s Market
The recent surge in gold and silver prices, driven by a weakening dollar and anticipation of U.S. rate cuts, presents a compelling opportunity for Omani investors and businesses to diversify portfolios through precious metals. However, caution is warranted as rate cut expectations hinge on U.S. economic data, introducing volatility risks. Smart investors should closely monitor inflation and employment trends in the U.S. to time their entry and capitalize on potential mid-year market shifts.
