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Strong U.S. Jobs Data Shifts Fed Expectations
The immediate trigger for gold’s decline was the May nonfarm payrolls report released by the Bureau of Labor Statistics on Friday, June 5, 2026. The U.S. economy added 172,000 jobs last month, more than double the 85,000 forecast by economists, while the unemployment rate remained unchanged at 4.3%. Additionally, nonfarm payroll growth for March and April was revised higher by a combined 93,000 jobs. This data signals that the labor market remains resilient despite earlier concerns about AI-driven displacement and geopolitical uncertainty.
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For investors, the implications were immediate and significant. According to the CME FedWatch tool, traders now fully price in a quarter-point rate hike by the end of 2026. Higher interest rates make non-yielding assets like gold less attractive, as investors can earn better returns in interest-bearing instruments such as Treasury bonds. This shift caused Treasury yields to soar and the U.S. dollar to strengthen, creating a hostile environment for gold prices.
