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Gold Drops 3.5% as Strong Jobs Boost Fed Rate Outlook

6/6/2026

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Summary

Gold Slides on Jobs

Gold fell up to 3.5% to $4,319.19 an ounce after robust May jobs data showed job growth topped forecasts.
The strong labor market kept the door open for the Federal Reserve (Fed) to consider raising interest rates this year.
Higher interest rates and a stronger U.S. dollar weighed on gold as bond yields rose.
Middle East tensions lifted energy prices, adding further pressure on gold.

Summary

Gold Slides

Hezbollah rejected a cease-fire agreement in Lebanon, heightening regional instability.
Israel said it would not withdraw its forces, adding to the tension.
An Iranian military adviser said U.S. talks had reached a deadlock but ruled out renewed military confrontation.
Gold futures settled at $4,365.30 per ounce on June 5, erasing year-to-date gains.
Silver futures closed at $68.943 per ounce, down 6.55% on the day.

Summary

Gold Declines

CME Group's FedWatch tool showed the market’s view of a December Fed rate hike rise to about 72% after the jobs report, up from 50%.
Bart Melek, head of commodity strategy at TD Securities, said the war in Iran and high energy prices make a Fed rate cut unlikely, raising gold’s cost of carry.
Gold was quoted at $4,341.52 per ounce at 1:44 p.m. EDT (1744 GMT) on June 5, 2026.

Summary

Gold Rises

The Bureau of Labor Statistics said May added 172,000 nonfarm jobs.
The gains were 70,000 in leisure-hospitality, 55,000 in government, and 35,000 in healthcare.
President Donald Trump nominated former Fed governor Kevin Warsh to lead the Federal Reserve, signaling fewer near-term rate cuts.
Gold rose above $5,600 per ounce and silver above $120 at January’s end, while the dollar index climbed 0.42% and unemployment held at 4.3%.

History

Historical Context

By June 1981, Fed Chair Paul Volcker had raised the federal-funds rate to 20% as inflation hit 13.5% and the Iran-Iraq war lifted crude prices 70%, sending gold from $850 to $600 per ounce. A recent 172,000-job gain reported by the BLS has revived expectations of another Fed tightening, while Hezbollah’s rejection of a cease-fire adds geopolitical risk, keeping gold volatile.

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Gold Slides on Jobs

Gold fell up to 3.5% to $4,319.19 an ounce after robust May jobs data showed job growth topped forecasts.
The strong labor market kept the door open for the Federal Reserve (Fed) to consider raising interest rates this year.
Higher interest rates and a stronger U.S. dollar weighed on gold as bond yields rose.
Middle East tensions lifted energy prices, adding further pressure on gold.

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