Gold's Jobs Shock Jolt: Payrolls Surge Spurs $4,352.90 Plunge, But Central Bank Stockpiling Holds the Floor

The gold market enters a critical juncture bruised by a double blow. A blockbuster May jobs report ignited an aggressive selloff on Friday, sending bullion tumbling more than 3% in a single session, while the looming June 10 consumer-price index reading threatens to deliver another potential shock. The metal settled at $4,352.90 per ounce, capping a weekly loss of nearly 5% and a monthly slide of 7.03%. The relative strength index stands at 34.4 — approaching oversold territory but still pointing south.

Labor-market data caught economists off guard. The Bureau of Labor Statistics reported 172,000 new nonfarm payrolls for May, more than double the 85,000 consensus estimate. The unemployment rate held steady at 4.3%. For gold, the implications are stark: a resilient job market gives the Federal Reserve room to keep its policy rate corridor at 3.50%–3.75% when it meets June 16–17, with markets pricing a 98.7% probability of no change. Higher-for-longer rate expectations boost both real yields and the dollar, two headwinds that directly undermine non-yielding assets like gold.

Technically, the picture looks precarious. The selloff on Friday knocked gold below its 200-day moving average, a closely watched long-term trend line. The next support lies at the May low around $4,367 — already tested and broken intraday. A return above the fallen moving averages would be the first credible sign of stabilization, but the current RSI reading offers little immediate relief. A further decline into oversold territory below 30 could eventually set the stage for a bounce, but the momentum remains firmly bearish for now.

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

All eyes now turn to Wednesday's CPI release for May. The April reading hit 3.8%, the highest since 2023, propelled by surging energy costs — Brent crude trades above $100 a barrel. A hotter-than-expected number would amplify dollar strength and deepen gold's losses. A cooler print, however, could provide the catalyst for a relief rally. The June 17 press conference by newly installed Fed Chair Kevin Warsh adds another layer of uncertainty: his tone on inflation versus growth risks will be scrutinized for any softening that might lower rate expectations.

Beneath the short-term volatility, the fundamental demand picture remains unusually robust. Central banks kicked off 2026 with net purchases of 244 tonnes in the first quarter, above the five-year average. Bar and coin demand surged to 474 tonnes, a 42% year-on-year gain and the second-highest quarterly tally on record. The World Gold Council highlights buyers including the central banks of Guatemala, Indonesia and Malaysia, all motivated by de-dollarization hedging and geopolitical concerns. That persistent buying provides a floor that did not exist in previous selloffs.

Institutional forecasts reflect the tension. J.P. Morgan trimmed its average 2026 gold price forecast from $5,708 to $5,243 but maintained its year-end target near $6,000, betting on a demand rebound in the second half. Goldman Sachs reaffirmed its $5,400 year-end objective after the March crash — the steepest monthly drop since June 2013, exceeding 10%. Meanwhile, physically backed gold ETFs saw global outflows of $2 billion in May, with holdings slipping to 4,121 tonnes and assets under management falling to $604 billion. Regional divergences tell a story: Europe gained $334 million, while North America lost $1.1 billion and Asia suffered its first monthly outflow since August 2025, down $1.2 billion.

Market sentiment remains polarized. In Kitco’s weekly survey, 11 of 15 analysts (74%) predicted further declines, while only two expected a recovery. Retail investors, by contrast, were split: 23 of 49 respondents looked for higher prices, 18 for lower, and eight for sideways action. The June 12 University of Michigan inflation expectations report will offer another data point before the Fed decision. Until then, gold must hold above the $4,300 zone — a level that has repeatedly acted as both support and flashpoint in recent weeks.

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