Gold’s Weekly Rout Deepens as Payrolls Surprise Triggers Sharpest Slide in Months

Gold suffered one of its most punishing daily drops in recent memory on Friday, as an unexpectedly strong US jobs report extinguished fading hopes of near-term Federal Reserve rate cuts and sent the metal tumbling to a fresh low. The selloff pushed spot prices as far as $4,352.90, a decline of 3.33 percent, while alternative benchmarks recorded $4,364.00, down 3.09 percent. On a weekly basis, the loss amounted to 4.51 percent, leaving the metal more than 22 percent below its all-time peak of $5,626.80 reached at the end of January.

The catalyst was the May non-farm payrolls number, which came in at 172,000 — double the 85,000 that economists had penciled in. The prior two months were also revised up by a combined 93,000 positions, and the unemployment rate held steady at 4.3 percent. Hourly earnings rose 0.3 percent, adding to the narrative that inflationary pressures remain stubborn. The 10-year US Treasury yield climbed six basis points to 4.54 percent, while the dollar strengthened, making dollar-priced gold more expensive for international buyers.

Market expectations for the Fed’s next move shifted abruptly. The CME FedWatch Tool now assigns a probability of nearly 48 percent to a rate hike by the end of the year, while other derivatives markets put the chance of a December increase at roughly 43 percent. For gold, which generates no income, rising real yields increase the opportunity cost of holding the metal and dampen short-term appetite.

Chart technicians have turned decidedly bearish. Gold on Friday broke below its 200-day moving average — a key long-term support — and is now trading 5.94 percent under the 50-day average of $4,639.68. Analysts also note the resolution of a head-and-shoulders pattern, a classic sell signal. The relative strength index stands at 34.4 to 35.0, approaching oversold territory but without finding a floor yet. For any technical recovery to take hold, prices would need to climb back above the 50-day line; until then, the next downside targets are clustered around $4,280, with a deeper floor at $4,100. On the upside, initial resistance sits near $4,550. In a Wall Street survey, 74 percent of analysts predicted further declines in the coming week.

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

Not all forces are aligned against gold, however. Official-sector buying continues to provide a structural counterweight. The People’s Bank of China increased its gold reserves for the 18th consecutive month in April, adding about 8.1 metric tons to bring total holdings to roughly 2,322 tons. Market observers view Beijing’s purchases as part of a long-term de-dollarization strategy that is largely insensitive to daily yield moves. Globally, central banks acquired an estimated net 244 tons of gold in the first quarter of 2026, with Poland standing out as a particularly active buyer, adding 31 tons.

Geopolitical risk, typically a supportive factor for gold, offered only limited protection. Tensions in the Middle East, including the de facto blockade of the Strait of Hormuz, sustain a risk premium, but reports of possible diplomatic progress between Washington and Tehran capped the haven bid. Chinese market commentators suggested that the selloff may represent a “bull trap” in which large institutional investors unloaded positions after the payrolls shock.

Silver bore the brunt of the risk-off move, sliding 7 percent to $69, while Bitcoin slipped to around $60,700, underscoring the broad-based repricing of assets that trade as inflation hedges or alternative investments.

Gold at a turning point? This analysis reveals what investors need to know now.

Looking ahead, all eyes are on the US consumer price index release due this week. A third consecutive sticky reading would reinforce the hawkish repricing and keep the pressure on gold. Conversely, a quick recovery above the 200-day moving average near $4,432 would stabilize the technical picture — at least temporarily.

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