Gold Prices Slip Amid Strong U.S. Jobs Report
Gold prices fell on Friday, leaving the metal on track for a weekly decline, after a strong U.S. employment report boosted expectations that the Federal Reserve could raise interest rates later this year. By 06:19 ET (10:19 GMT), spot gold was down 0.2% at $4,465.54 per ounce, while gold futures dropped 0.3% to $4,492.72 per ounce.
U.S. Labor Market Shows Resilience
The May nonfarm payrolls report revealed 172,000 jobs added, more than double the consensus of 85,000, while the unemployment rate remained steady at 4.3%. Gains were driven by leisure and hospitality, local government, and health care, while employment in financial activities slipped. April and March payrolls were also revised higher, adding a combined 93,000 jobs to previous counts, indicating the U.S. labor market has remained resilient despite ongoing Iran conflict-related headwinds.
Wage Growth and Inflation Implications
Average hourly earnings increased 0.3% month-on-month, above April’s 0.2%, while annual wage growth eased slightly to 3.4%. Analysts noted that although strong hiring and stable unemployment support the economy, the labor data are unlikely to dramatically alter the Fed’s policy outlook. Markets now anticipate at least one Fed rate hike by the end of 2026, according to the CME FedWatch Tool.
Dollar Strength and Gold Pressure
A stronger U.S. dollar, supported by expectations that the American economy may be insulated from rising oil prices, has further reduced gold’s appeal. As a non-yielding asset, gold has declined roughly 13% over the past three months, even amid geopolitical uncertainty.
Middle East Tensions Keep Market Nervous
Investors are also focused on developments in the Middle East. Hezbollah rejected a ceasefire between Israel and Lebanon, casting doubt on a potential U.S.-Iran peace deal, which could affect the Strait of Hormuz and global oil flows. Tehran has made a Lebanon ceasefire a key condition for negotiations, while the U.S. and Israel’s joint operation in Iran since late February has spread tensions across the region, including Lebanon.
Hezbollah Criticism of Israel-Lebanon Agreement
Hezbollah leader Naim Kassem called the U.S.-brokered ceasefire “absurd, humiliating, and insulting,” insisting Israel must fully withdraw before halting attacks. Kassem described the agreement as a “road map for the annihilation of a section of the Lebanese people and the enslavement of the rest,” according to the Wall Street Journal. Israeli airstrikes have killed at least four people, while Lebanese troops moved into contested areas in southern Lebanon, which have seen months of intense fighting, per Associated Press reports.
