Select Language

Gold price falls on strong US Nonfarm Payrolls yet is poised for weekly advance

Breaking news

Gold price falls on strong US Nonfarm Payrolls yet is poised for weekly advance

  • X
  • facebook
  • LINE
  • RSS

  • X
  • facebook
  • LINE
  • RSS
New update 2025.06.07 02:16
Gold price falls on strong US Nonfarm Payrolls yet is poised for weekly advance

update 2025.06.07 02:16

  • XAU/USD falls after strong NFP data cuts rate cut hopes, but holds weekly gain above 1.30%.
  • US adds 139K jobs in May; Unemployment Rate steady at 4.2%, boosting US Dollar and Treasury yields.
  • Fed cut expectations fade as traders reassess outlook ahead of June 17-18 FOMC meeting.

Gold price extended its losses for the second consecutive day on Friday but is poised to finish the week with gains of over 1.30% after the latest Nonfarm Payrolls report in the United States (US) was solid, pressuring traders to trim their bets that the Federal Reserve (Fed) will ease monetary policy. At the time of writing, the XAU/USD trades at $3,316, down 0.84%.

The US Bureau of Labor Statistics (BLS) revealed that the labor market remains resilient as the Unemployment Rate figures remained unchanged compared to April. In the meantime, Wall Street recovers some of its Thursday losses amid the ongoing feud between US President Donald Trump and Tesla CEO Elon Musk, spurred by the House of Representatives' approval of the US debt ceiling increase.

Bullion prices took a hit as the buck showed signs of life, climbing 0.49% as depicted by the US Dollar Index (DXY). The move was sponsored by investors adjusting their estimates of the Fed rate cut and higher US Treasury bond yields.

Although Gold is taking a hit, heightened tensions between Russia and Ukraine and the prolonged conflict between Israel and Hamas could still drive prices higher.

Next week, the US economic docket will be absent of Fed speakers as they enter the blackout period ahead of the June 17-18 meeting. Traders would be eyeing Consumer Price Index (CPI) figures, followed by the Producer Price Index (PPI) and the University of Michigan Consumer Sentiment.

Daily digest market movers: Gold drops as soaring US yields underpin the US Dollar

  • The US 10-year Treasury yield surges over nine-and-a-half basis points to 4.484%. US real yields have followed suit and are also up for the same amount at 2.196%, a headwind for Bullion prices.
  • May US Nonfarm Payrolls print surpassed forecasts of 130K, rose by 139K but missed April's downwardly revised 147K. Although the labor market is cooling, it remains in great condition as the US economy decelerates.
  • The Unemployment Rate stood at 4.2%, and along with the jobs report, sparked a repricing of interest rates, with less than two expected cuts by the Fed toward the end of 2025.
  • Metals Focus said, "Central banks worldwide are set to buy 1,000 metric [tonnes] of Gold in 2025, marking a fourth straight year of massive purchases as they shift reserves away from [US D]ollar assets."
  • The de-escalation of US-Sino trade war tensions could exert downward pressure on Gold, which so far has gained over 26% in the year.
  • Money markets suggest that traders are pricing in 44.5 basis points of easing toward the end of the year, according to Prime Market Terminal data.

Source: Prime Market Terminal

XAU/USD technical outlook: Gold remains bullish despite losing some ground below $3,360

Gold price consolidates after the XAU/USD has fallen to a four-day low of $3,316 but holds above $3,300, which is seen as a crucial floor that, if cleared, could open the path to test $3,250.

The Relative Strength Index (RSI) shifted bearish, indicating that XAU/USD could extend its losses; however, the overall trend favors the bulls.

If Gold stays above $3,300, this could pave the way to test the current week's peak of $3,403 hit on June 5, followed by the $3,450 mark. If surpassed, up next lies the all-time high at $3,500.

On the other hand, if Gold falls below $3,300, sellers could send XAU/USD on a tailspin, testing the 50-day Simple Moving Average (SMA) at $3,235, followed by the April 3 high, which has since turned into support at $3,167.

Gold FAQs

Gold has played a key role in human's history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn't rely on any specific issuer or government.

Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country's solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.

Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.

The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.



Date

Created

 : 2025.06.07

Update

Last updated

 : 2025.06.07

Related articles


Show more

FXStreet

Financial media

arrow
FXStreet

FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.

Was this article helpful?

We hope you find this article useful. Any comments or suggestions will be greatly appreciated.  
We are also looking for writers with extensive experience in forex and crypto to join us.

please contact us at [email protected].

Thank you for your feedback.
Thank you for your feedback.

Most viewed

Canadian Dollar gives back gains despite upbeat jobs data

The Canadian Dollar (CAD) saw firm gains in employment figures on Friday, with an overall net increase in Canadian employment thumping median market forecasts for a contraction.
New
update2025.06.07 06:04

Mexican Peso climbs to eight-month highs against the US Dollar despite upbeat US jobs data

The Mexican Peso (MXN) is experiencing its third consecutive day of gains against the US Dollar (USD) on Friday, pushing the USD/MXN exchange rate to its lowest level in eight months.
New
update2025.06.07 04:39

USD/JPY Price Forecast: Soars to weekly high, near 145.00 on hot US jobs report

USD/JPY extended its uptrend for two consecutive days, with the major currency pair reaching a new weekly high of 145.09, driven by solid US economic data on Friday.
New
update2025.06.07 04:37

EUR/USD declines on hot US NFP report, dents ECB-driven Euro rally

EUR/USD trip down extends its losses on Friday after hitting a six-week high near 1.1500 as Nonfarm Payroll figures in the United States (US) came in stronger than expected despite cooling off.
New
update2025.06.07 03:56

Dow Jones Industrial Average tests fresh highs on NFP beat despite downside revisions

The Dow Jones Industrial Average (DJIA) briefly tested fresh 13-week peaks on Friday, with equities taking a step higher after Nonfarm Payrolls (NFP) jobs data came in stronger than expected.
New
update2025.06.07 03:03

Silver Price Forecast: XAG/USD hits a 13-year high on increased demand for the industrial metal

Silver (XAG/USD) is experiencing another day of positive gains, which has pushed prices to $36.00, its highest level since February 2012, providing a firm barrier of resistance. 
New
update2025.06.07 02:45

Gold price falls on strong US Nonfarm Payrolls yet is poised for weekly advance

Gold price extended its losses for the second consecutive day on Friday but is poised to finish the week with gains of over 1.30% after the latest Nonfarm Payrolls report in the United States (US) was solid, pressuring traders to trim their bets that the Federal Reserve (Fed) will ease monetary poli
New
update2025.06.07 02:15

Fed's Harker: Still possible the Fed can cut rates later this year

Federal Reserve (Fed) Bank of Philadelphia President Patrick Harker is embarking on a farewell tour.
New
update2025.06.07 01:57

AUD/USD falls as US Dollar bulls return following NFP data

The Australian Dollar (AUD) is weakening against the US Dollar (USD) following Friday's Nonfarm Payrolls (NFP) pushed back expectations of a near-term interest rate cut from the Federal Reserve (Fed).
New
update2025.06.07 00:52

GBP/USD slips as strong US jobs data cools Fed rate cut bets

GBP/USD tumbled during the North American session, down over 0.30% after the latest jobs report in the United States (US) maintained the status quo, with the economy remaining strong. The pair traded at 1.3526 after hitting a daily high of 1.3586.
New
update2025.06.07 00:21

Disclaimer:arw

All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.

The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.

  • Facebook
  • Twitter
  • LINE

Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy

I agree
share
Share
Cancel