Gold’s $4,352.90 Plunge: Labor Market Vigor Overpowers Both Technical Supports and Central Bank Demand

A single US payrolls report has sent the gold market into its sharpest weekly decline in months, pitting the metal's rate-sensitivity against a powerful structural shift in global reserve holdings. The May employment data, which showed 172,000 new nonfarm jobs—nearly double the 85,000 to 88,000 consensus—crushed any lingering hopes of imminent Federal Reserve rate cuts. For a zero-yielding asset like gold, the message was unambiguous: the cost of holding it just went up.

The selloff accelerated as traders recalibrated expectations. Yields on US Treasuries surged in response, and the dollar strengthened, two headwinds that historically drain capital from the precious metal. Gold closed Friday at $4,352.90, a drop of 3.33% on the day. The weekly loss widened to 4.75%, a figure that reflects not only the payrolls shock but also upward revisions to prior months’ job gains that painted an even more resilient picture of the American economy.

Chart damage was severe. The yellow metal sliced through the psychologically important $4,500 level and breached its 200-day moving average near $4,380–$4,400. The relative strength index now sits at 34.4, territory that often triggers a short-term bounce. But technicians warn that any corrective rally will be capped unless gold can reclaim $4,500—a feat that looks unlikely given the shifting interest-rate outlook. The 50-day moving average is already more than 6% above the current spot price, underscoring the bearish momentum.

Should investors sell immediately? Or is it worth buying Gold?

Yet beneath the surface of this rout, a very different story is unfolding in the official sector. Central banks bought a net 863 tonnes of gold in 2025, with Poland, China, and Turkey among the most active purchasers. A European Central Bank report released on June 2 highlighted the scale of this shift: gold now accounts for 27% of global official reserves by value, while the share held in US Treasuries has slipped to 22%. The ECB itself, however, was quick to note that much of that overtaking reflects the strong price appreciation of recent years rather than a purely volumetric shift.

The tension between these two forces—speculative selling and central bank accumulation—creates a curious dynamic. While traders flee, institutions with longer time horizons continue to build positions, seeking to reduce dollar dependency and hedge geopolitical risks. Physical gold ETFs, however, are feeling the heat. The SPDR Gold Shares fund, the largest of its kind, has seen notable outflows, and further institutional selling could amplify near-term weakness.

All eyes now turn to the US consumer price index due Wednesday, June 10. A higher-than-expected reading would likely fuel additional selling, with the zone between $4,100 and $4,280 emerging as the next critical support area. The Federal Reserve’s rate decision on June 16–17 follows shortly after. Given the labor market’s strength, few analysts expect any dovish surprise, keeping the pressure on gold for the weeks ahead.

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