Gold falls 12% from April highs after key support breaks

Gold fell nearly 12% from its April highs, breaking below a key support level after stronger-than-expected US jobs data reinforced expectations the Federal Reserve will keep interest rates higher for longer.

XAU/USD is now testing its yearly open support, a level that has held since January, according to trading data from multiple platforms. The breakdown below the prior support zone marks a shift in the near-term technical structure for the metal, which had traded in a range for much of the first quarter before rallying to its April peak.

The selloff accelerated after the June 5 nonfarm payrolls report showed the US economy added more jobs than economists had forecast, pushing Treasury yields higher and the dollar stronger. Gold has declined roughly 12% from the 2026 peak, erasing gains accumulated over the prior two months. Silver has followed gold lower, with both precious metals remaining under pressure as rate-hike expectations weigh on non-yielding assets, according to market data.

The breakdown comes as the US Dollar Index strengthened on the jobs data, making dollar-denominated commodities more expensive for holders of other currencies. Higher interest rates also increase the opportunity cost of holding gold, which offers no yield. The move below support has shifted the near-term outlook for gold, with traders now watching whether the yearly open level holds or gives way to further declines.

Compared to its 2026 high, gold has now given back all gains from the March-to-April rally, a move that had been driven by geopolitical uncertainty and central bank buying. The current level represents a decline from the start of the year, according to market data. Silver, which tends to amplify gold's moves, has seen a steeper percentage decline over the same period.

The technical breakdown carries significance beyond gold itself. A sustained move lower in precious metals often signals shifting macro expectations — in this case, a market repricing of the rate outlook after the jobs data surprised to the upside. If gold fails to hold the yearly open, the next major support lies near $2,000, a level that has acted as both resistance and support in prior cycles.

The Federal Reserve's June 17-18 policy meeting is the next catalyst for gold, where the rate decision and updated dot plot will determine whether the current selloff deepens or stabilizes. Markets will also watch upcoming US inflation data for further clues on the rate path.

This article is for informational purposes only and does not constitute investment advice.