Gold endured its worst week in months as an unexpectedly muscular US jobs report crushed hopes of near-term Fed easing, sending the metal through both a psychological barrier and a critical moving average. The selloff left the yellow metal at $4,364 by Friday’s close, down 3.09% on the day and 4.51% over the week, with an intraday low of $4,312 — the weakest since late March.
The catalyst was unambiguous. The US economy added 172,000 nonfarm positions in May, more than double the 85,000 forecast, while prior months were revised higher by a combined 93,000 jobs. The unemployment rate held steady at 4.3%, and average hourly earnings rose 0.3% month-on-month, pushing the annual wage growth rate to 3.4%. For a Federal Reserve still wrestling with sticky inflation, the data offered no room for dovish pivots.
The rates market responded instantly. According to the CME FedWatch Tool, the implied probability of a rate hike by the December 2026 meeting vaulted from 50% to roughly 70%. The yield on the 10-year US Treasury note shot up to 4.54%, while the dollar index climbed to 99.80. For gold, which carries no yield, rising real rates and a stronger greenback are a poisonous combination — higher opportunity costs and a more expensive purchase price for overseas buyers.
Technically, the damage was severe. The metal sliced through the psychologically important $4,400 threshold and, more significantly, breached its 200-day moving average near $4,432. This long-term indicator, once broken, is considered a classic bearish signal. The relative strength index now sits at 35, nudging into oversold territory but not yet extreme. Charts show the next major support in the $4,300 zone, while any recovery must first contend with resistance around $4,550 — a level that will test whether the rate-driven selling has exhausted itself.
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Yet beneath the day-to-day rate anxiety, a contrasting force is at work. Central banks continue to accumulate gold at a historic clip. The People’s Bank of China added another 8.1 tonnes in April, its 18th consecutive monthly increase, lifting official reserves to roughly 2,322 tonnes. Globally, central banks purchased a net 244 tonnes in the first quarter of 2026, with Poland standing out by adding 31 tonnes. This institutional demand is structurally different from speculative flows — it is less sensitive to weekly yield shifts and driven by long-term de-dollarization strategies.
That structural support, however, was not enough to prevent the metal from slipping 22.4% below its 52-week high of $5,627. Gold ETFs reported outflows of around $2 billion in May alone, underscoring the shift in sentiment among financial investors. The safe-haven bid that typically accompanies geopolitical tremors — such as the ongoing tensions over the Strait of Hormuz and the Iran standoff — has been utterly eclipsed by rate fears. Even the prospect of diplomatic progress between Washington and Tehran did little to steady the metal, though the underlying inflation risk from oil supply disruptions remains on the table.
All eyes now turn to the FOMC meeting on June 17 and the upcoming US consumer price index release. If inflation data shows continued stickiness, the hawkish rate narrative will tighten further, putting gold under added pressure. A swift recovery above the broken 200-day average would be needed to restore chart confidence; without it, the $4,300 area looms as the next critical test.
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