Weak US Jobs Data Sparks Gold Rally While Central Banks Accumulate at Record Pace Despite Brutal Quarter
Published on 07/03/2026 at 08:43 | Redaktion boerse-global.de
Gold staged its first weekly advance since late May on Friday, after a surprisingly soft US employment report sent the dollar tumbling and reignited bets that the Federal Reserve may hold off on further rate hikes. The rebound, which lifted the spot price to between $4,144 and $4,179 an ounce, came as the metal clawed back some of its steep losses from a bruising second quarter.
Payrolls Miss by a Wide Margin
The US economy added just 57,000 nonfarm jobs in June, far below the 110,000 to 115,000 that analysts had penciled in and the weakest monthly gain in four months. Revisions to prior months added to the downbeat picture, reinforcing the narrative of a cooling labour market.
The unemployment rate edged down to 4.2% from 4.3% in May, but market observers attributed the decline largely to a drop in the participation rate to 61.5%—its lowest in five years. Average hourly earnings rose 0.3% month-on-month and 3.5% year-on-year, offering little additional pressure on the Fed.
Fed Rate Expectations Tumble, Dollar Follows
The disappointing figures slammed the door on any near-term tightening. According to the CME FedWatch Tool, the probability of a rate increase in September slumped to around 51–54% from 66% a day earlier. For the July meeting, traders now see the chance of a hike at under 18%.
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The dollar index immediately weakened, dipping to 100.85 at one point. A softer greenback makes gold cheaper for buyers using other currencies. At the same time, the yield on the 10-year US Treasury note fell to roughly 4.47%, lowering the opportunity cost of holding the non-yielding precious metal.
Central Banks Keep Buying Even as Prices Sink
While short-term traders cheered the jobs data, the more structural support for gold continues to come from official-sector purchases. In May alone, central banks bought a net 41 tonnes of the metal, according to the World Gold Council. Poland led the charge with 18 tonnes, its fourth consecutive month of double-digit acquisitions, followed by China.
That buying persisted even as gold suffered its worst quarter in over a decade. The metal lost roughly 16% in the three months through June—the steepest quarterly decline since Q2 2013—and briefly touched a low of $3,942 on June 30, its weakest since early November 2025. Some calculations put the second-quarter drop closer to 13%, but the magnitude of the collapse is undisputed.
The institutional appetite shows no sign of waning. A survey by the Official Monetary and Financial Institutions Forum (OMFIF) found that 45% of central banks plan to increase their gold reserves over the next 12 months—a record high. In the first quarter of 2026, net purchases already reached roughly 244 tonnes, above the previous quarter and the five-year average.
Goldman Cuts Target but Long-Term Optimism Prevails
Goldman Sachs recently trimmed its year-end 2026 target for gold to $4,900 from $5,400, citing expectations that the Fed will not cut rates for the rest of this year. Despite the downward revision, the bank remains constructive on the metal’s long-term prospects, pointing to the structural demand from central banks.
Other forecasts are even more bullish. UBS sees potential for gold to reach $5,200 an ounce, while participants in the OMFIF survey project prices between $5,000 and $6,000 over the next year.
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Technical Picture Shows Tentative Support
From a chart perspective, gold has reclaimed the $4,100 level after testing it in late June. The next resistance zone lies between $4,160 and $4,210, while support has solidified between $4,000 and $4,032. The relative strength index sits at 42.6, offering no clear directional signal.
Geopolitical factors are also lending a hand. Reports of increased shipping activity and security concerns in the Strait of Hormuz are burnishing gold’s safe-haven appeal, adding to the tailwind from the weakening dollar and falling bond yields.
If the metal can hold above $4,100, the path toward $4,160–$4,210 could open. Conversely, a drop back below $4,032 would threaten the nascent recovery and expose the recent lows near $3,942.
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