Better-than-expected non-farm payroll data boosted the US dollar index, pushing it above the 100 mark, while gold prices plummeted.
2026-06-06 02:05:18
On Friday (June 5) during the North American trading session, the price of spot gold (XAU/USD) plummeted, reaching $4,336 per ounce, a drop of more than 3%, as the latest US non-farm payroll data was much better than expected and the employment data for the first three months was revised upward.
Non-farm payroll data triggers market volatility; stronger dollar pressures gold prices.
The U.S. added 172,000 non-farm jobs in May, far exceeding the market expectation of 85,000, more than double the forecast, highlighting the resilience of the U.S. labor market. Market sentiment is further leaning towards the Federal Reserve prioritizing inflation control. Meanwhile, the U.S. unemployment rate remained unchanged at 4.3%, providing solid fundamental support for Federal Reserve officials to consider raising interest rates.
Driven by rising market expectations of interest rate hikes, the US dollar strengthened significantly. The US Dollar Index (DXY) rebounded from its intraday low of around 99.16, rising 0.62% and holding above the 100.06 level, closing at 100.0643.
US Treasury yields rose sharply as the market bets on a Federal Reserve rate hike in 2026.
U.S. Treasury yields surged across the board, with the 10-year Treasury yield, which is negatively correlated with gold prices, rising nearly 6 basis points to 4.541%, becoming a significant negative factor suppressing gold prices.
Cleveland Fed official Beth Hammark made a hawkish statement: "Maintaining interest rates unchanged at present is reasonable, but if the current economic trend continues, the Fed may soon need to intervene to curb high inflation."
Money market pricing indicates a 67% probability of a rate hike at the Federal Reserve's December meeting, with the market widely expecting the Fed to hold rates steady in June and maintain current interest rates.
Geopolitical Situation: Hezbollah rejects ceasefire agreement, US-Iran negotiations stall.
The geopolitical situation in the Middle East shows no signs of improvement. Iran strongly supports its Lebanese ally Hezbollah and rejects the ceasefire proposal put forward by the United States, hindering the US-Iran negotiations. Iran has stated that it will only conclude a peace agreement with the United States once the fighting in Lebanon has subsided.
Iranian Foreign Minister Abbas Araqchi stated, "The conflict between the US and Iran will only end after the war in Lebanon concludes, and the prerequisite for a ceasefire in Lebanon is the complete withdrawal of Israel from the territories it occupies."
US Economic Data Preview for Next Week
The United States will release key economic data next week, including consumer inflation, producer price inflation, and initial jobless claims.
Technical Analysis
(Spot gold daily chart source: FX678)
Gold prices have broken below the 200-day simple moving average at $4,427, indicating a shift in the technical trend from bullish to bearish.
The Relative Strength Index (RSI) shows that bearish momentum continues to dominate, and the indicator is rapidly approaching the oversold zone, indicating increasing selling pressure. Gold prices face minimal downside resistance in the short term.
If spot gold breaks below the $4,300 support level, the next support level will be the upward trendline extending from the October 2025 low, in the range of $4,200 to $4,230. After this support is breached, the key target below is the interim low of $4,098 on March 23.
For gold prices to reverse course and begin a rebound, bulls need to regain control of the 200-day moving average and the $4,450 level. Once this level is secured, gold will face strong resistance at $4,500, followed by the 50-day moving average resistance at $4,627.
Non-farm payroll data triggers market volatility; stronger dollar pressures gold prices.
The U.S. added 172,000 non-farm jobs in May, far exceeding the market expectation of 85,000, more than double the forecast, highlighting the resilience of the U.S. labor market. Market sentiment is further leaning towards the Federal Reserve prioritizing inflation control. Meanwhile, the U.S. unemployment rate remained unchanged at 4.3%, providing solid fundamental support for Federal Reserve officials to consider raising interest rates.
Driven by rising market expectations of interest rate hikes, the US dollar strengthened significantly. The US Dollar Index (DXY) rebounded from its intraday low of around 99.16, rising 0.62% and holding above the 100.06 level, closing at 100.0643.
US Treasury yields rose sharply as the market bets on a Federal Reserve rate hike in 2026.
U.S. Treasury yields surged across the board, with the 10-year Treasury yield, which is negatively correlated with gold prices, rising nearly 6 basis points to 4.541%, becoming a significant negative factor suppressing gold prices.
Cleveland Fed official Beth Hammark made a hawkish statement: "Maintaining interest rates unchanged at present is reasonable, but if the current economic trend continues, the Fed may soon need to intervene to curb high inflation."
Money market pricing indicates a 67% probability of a rate hike at the Federal Reserve's December meeting, with the market widely expecting the Fed to hold rates steady in June and maintain current interest rates.
Geopolitical Situation: Hezbollah rejects ceasefire agreement, US-Iran negotiations stall.
The geopolitical situation in the Middle East shows no signs of improvement. Iran strongly supports its Lebanese ally Hezbollah and rejects the ceasefire proposal put forward by the United States, hindering the US-Iran negotiations. Iran has stated that it will only conclude a peace agreement with the United States once the fighting in Lebanon has subsided.
Iranian Foreign Minister Abbas Araqchi stated, "The conflict between the US and Iran will only end after the war in Lebanon concludes, and the prerequisite for a ceasefire in Lebanon is the complete withdrawal of Israel from the territories it occupies."
US Economic Data Preview for Next Week
The United States will release key economic data next week, including consumer inflation, producer price inflation, and initial jobless claims.
Technical Analysis
(Spot gold daily chart source: FX678)
Gold prices have broken below the 200-day simple moving average at $4,427, indicating a shift in the technical trend from bullish to bearish.
The Relative Strength Index (RSI) shows that bearish momentum continues to dominate, and the indicator is rapidly approaching the oversold zone, indicating increasing selling pressure. Gold prices face minimal downside resistance in the short term.
If spot gold breaks below the $4,300 support level, the next support level will be the upward trendline extending from the October 2025 low, in the range of $4,200 to $4,230. After this support is breached, the key target below is the interim low of $4,098 on March 23.
For gold prices to reverse course and begin a rebound, bulls need to regain control of the 200-day moving average and the $4,450 level. Once this level is secured, gold will face strong resistance at $4,500, followed by the 50-day moving average resistance at $4,627.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
