The price of gold rose to nearly the highest level in recorded history on Wednesday as Treasury yields and the dollar fell.
Spot gold prices pushed above $2,040 per ounce, nearing the previous record contract settlement high of $2,069 notched in August 2020, as investors sought the precious metal as a safe-haven asset.
The rise in gold prices comes after the U.S. dollar sank to a two-month low on Tuesday following news that showed the labor market is starting to soften. Gold further climbed after a Wednesday employment report from ADP came in weaker than expected.
There were about 9.9 million job openings across all sectors that month, according to the Bureau of Labor Statistics Job Openings and Labor Turnover Survey updated Tuesday, the lowest level in nearly two years.
The lower numbers showed the labor market might finally be weakening in the face of a barrage of interest rate hikes by the Federal Reserve over the past year meant to tamp down inflation.
JOB OPENINGS FALL BELOW 10 MILLION FOR FIRST TIME IN NEARLY TWO YEARS
"The main trigger was the JOLTS data, which is starting to point to labor market moderating. So we have this kind of grind lower in the dollar and we're also looking at yields," UBS FX strategist Vassili Serebriakov said, according to Reuters.
The downward trend of job openings means the Fed is less likely to raise rates again in May. In fact, after the JOLTS report, investors now assign a 57% chance that the Fed will pause rate hikes, according to CME Group's FedWatch tool, which calculates the probability using futures contract prices for rates in the short-term market targeted by the Fed.
Gold has been a fairly reliable investment, given the turbulence the economy has experienced with too-high inflation, the collapse of Silicon Valley Bank, and fears of a recession. In just the past six months, the price of bullion has risen by more than 17% and is up more than 51% over the past five years.
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Friday's much-anticipated jobs report will show how many jobs the economy added in March. It is expected the economy added some 240,000 jobs and that the unemployment rate will remain around the level it is at now — a still-low 3.6%.
"We have a lot of data to chew on this week that will either show that the U.S. economy is resilient enough to withstand the Fed's ongoing rate-hike mentality or if markets will get their break," Juan Perez, director of trading at Monex USA, said.