Mar 5, 2025

GLD−0.14%GOLD−0.09%

Gold moved lower early on Wednesday even as the dollar fell sharply after a report showed U.S. private-sector hiring collapsed last month.

Gold for April delivery was last seen down US$11.70 to US$2,908.90 per ounce.

The drop comes even with the U.S. dollar fell to a four-month low as the ADP private-sector employment report showed hiring plunged last month, with just 77,000 new jobs added, down from 186,000 in January and well below the FactSet consensus estimate of 142,500.

The ICE dollar index was last seen down 1.05 points to 104.7, the lowest since Nov.5.

The ADP report is the latest signal the U.S. economy is sputtering, The Federal Reserve Bank of Atlanta’s GDPNow forecast expects the U.S. economy to contract by 2.8% in the first quarter.

U.S. President Donald Trump on Tuesday launched a trade war against the country’s largest trading partners, imposing 25% tariffs on imports from Canada and Mexico, while doubling its levy on Chinese goods to 20%. Canada and China have already put countervailing tariffs in place and Mexico will release its response on Sunday.

The trade war is expected to slow global growth and raise inflation in the United States, likely stalling interest-rate cuts from the Federal Reserve.

“Gold dipped…but overall remains supported as the trade war escalates, central banks buy bullion, the dollar weakens, and the US economy heads towards stagflation,” Saxo Bank noted.

Treasury yields fell as bond prices rose, with the U.S. two-year note last seen paying 3.918%, down 8.9 basis points, while the yield on the 10-year note was down 4.6 points to 4.203%.