Stock Market Impact: Spot gold slipped 0.2% to $4,465.54 per ounce and gold futures dropped 0.3% to $4,492.72 per ounce, extending a weekly decline; the move reflects heightened expectations of a Federal Reserve rate hike, which pressures non‑yielding assets like gold.
Revisions to Employment Data: April payrolls were revised upward to 179,000 from an initial 115,000, and March payrolls were revised to 214,000 from 185,000, adding a combined 93,000 jobs over the two months.
Labor Market Strength: May non‑farm payrolls rose 172,000, far above the 85,000 forecast; the unemployment rate held steady at 4.3%, matching expectations; average hourly earnings increased 0.3% month‑on‑month, slightly above April’s 0.2% gain.
Interest‑Rate Outlook: Markets now anticipate at least one Fed rate increase by the end of 2026, according to CME’s FedWatch Tool, shifting from earlier expectations of steady rates through 2026 and a possible hike in early 2027.
Commodity Price Context: Gold has fallen roughly 13% over the past three months; a stronger U.S. dollar, supported by expectations of higher rates and the view that the U.S. economy will remain insulated from oil‑price spikes, makes gold more expensive for overseas buyers.
Geopolitical backdrop: Ongoing U.S.–Iran conflict has driven oil prices higher, raising inflation concerns; Hezbollah leader Naim Kassem rejected a recent Israel‑Lebanon ceasefire, adding uncertainty to the region and potential implications for oil supply and inflation.
