Gold and silver prices rose on Wednesday as US Treasury bond yields fell after data showed December retail sales growth stalled, signalling a softening economy ahead of key jobs data.

Lower US yields reduce the opportunity cost of holding non‑yielding assets such as gold, and they often accompany macroeconomic shifts, like expectations of slower growth or looser policy, that tend to support precious metals.

Spot gold was 0.7 per cent higher at $5,057.23 per ounce by 04:23 GMT.

US gold futures for April delivery gained 1pc to $5,081.40 per ounce.

Spot silver was up 2.3pc at $82.56/oz, after falling more than 3pc in the previous session.

“Over the last couple of weeks, (precious metals) became very dislocated from fundamentals, so it pretty much decoupled from interest rate policy. Yields being lower are obviously supportive of gold today,” said Kyle Rodda, a senior market analyst at Capital.com.

US yields fell on Tuesday after a raft of data suggested the economy may be softening, giving the US Federal Reserve more room to cut interest rates.

US retail sales were unchanged in December as households scaled back spending on motor vehicles and other big-ticket items, potentially setting consumer spending and the economy on a slower growth path.

“After soft retail sales numbers, there’s the expectation that perhaps, further and deeper rate cuts may be needed more imminently than previously thought,” Rodda added.

Federal Reserve Bank of Cleveland President Beth Hammack, however, said on Tuesday that the US central bank faces no urgency to change the setting of interest rates this year amid a “cautiously optimistic” outlook for economic activity.

Investors expect at least two 25-basis-point rate cuts in 2026, with the first one expected in June. Non-yielding bullion tends to do well in low-interest-rate environments.

Investors await the non-farm payrolls report for January, due later in the day, and inflation data on Friday for more cues on the Fed’s monetary policy path.

Spot platinum rose 2.1pc to $2,131.60 per ounce, while palladium added 2pc to $1,741.78.