A single Friday morning was enough to erase months of gold’s hard-won gains. The US economy added 172,000 nonfarm payrolls in May — roughly double the 85,000 economists had penciled in — and bullion paid the price. The metal closed the week at $4,352.90 an ounce, suffering a weekly loss of nearly 4.75 percent. The rout marked the steepest weekly decline in recent memory, driven by a repricing of Federal Reserve rate expectations.
Rate-hike bets resurface as yields climb
The May employment report was so robust that it flipped the macro narrative overnight. A resilient labour market gives the Fed little reason to ease, and the probability of a rate increase by December jumped to 43 percent, according to market pricing. The yield on the 10-year US Treasury note rose to 4.536 percent, and a firmer dollar added further headwinds for dollar-denominated commodities. Gold, which offers no income, becomes less competitive when real yields rise. The relative strength index slid to 34.4, hovering just above oversold territory — a technical gauge of just how intense the selling pressure has been.
Analyst sentiment sours, but retail stays hopeful
The weekly Kitco survey captured the mood shift among market professionals. Eleven out of 15 analysts — or 74 percent — predicted further declines in the coming days. Only two expected a rebound. Retail investors, however, were less convinced: out of 49 participants, 23 looked for higher prices, 18 for further losses, and 8 for a sideways move. This split between professional bearishness and retail optimism suggests the market has not yet reached a consensus on where gold bottoms.
Technical damage deepens
On the charts, the sell-off broke below the 200-day moving average on Friday — a key long-term support that had held since last year’s rally. The next major floor lies around the May low of $4,367, a level already breached in the immediate aftermath of the payrolls release. Below that, chartists point to the $4,250 area as the last meaningful support before a deeper correction unfolds. A return above the fallen moving averages would be the first sign of stabilisation, but for now the metal remains well adrift of that zone.
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Central banks and ETFs paint a divided picture
Even as speculative money fled, official-sector buying continued unabated. The People’s Bank of China added 320,000 fine troy ounces to its gold reserves in May, marking the 19th consecutive month of accumulation — the longest purchasing streak since 2015. Goldman Sachs has described these persistent central-bank purchases as a structural buffer against sharp price declines, highlighting how geopolitical tensions are driving demand for the reserve asset.
On the other side of the ledger, exchange-traded funds tell a gloomier story. Globally, physically backed gold ETFs saw net outflows of $2 billion in May, dragging total holdings to 4,121 tonnes and assets under management to $604 billion. The regional divergence is stark: Europe was the only region to attract inflows, adding $334 million, while North America lost $1.1 billion and Asia posted its first monthly outflow since August 2025 at $1.2 billion. At the COMEX, net long positions slipped 2.5 percent to 466 tonnes, as money managers increased their bets but other participants trimmed theirs.
What comes next: CPI, the ECB, and the Fed
The week ahead is packed with catalysts. On June 10, US consumer price data will test whether inflation remains sticky enough to keep the Fed on hold — a higher-than-expected reading would likely pile more pressure on gold. The following day, the European Central Bank meets, with a quarter-point hike in the deposit rate to 2.25 percent widely anticipated. Then on June 16–17, the Federal Reserve’s own policy decision looms; the May payrolls report is one of the last major data points before that meeting.
For now, gold sits at a crossroads. The strong labour data have revived the possibility of tighter monetary policy, yet central-bank demand and geopolitical uncertainty provide a floor. Whether the $4,250 support holds or gives way will likely depend on inflation’s next move.
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