Key Takeaways:
COMEX gold slipped to $4,514.57 per troy ounce as a surge in crude oil stoked inflation fears and reinforced expectations the Federal Reserve will hold rates steady.
"Rising energy costs feed directly into inflation expectations, which reduces the appeal of non-yielding assets like gold," said Ole Hansen, head of commodity strategy at Saxo Bank.
The precious metal traded between $4,447.45 and $4,547.29 in the past 24 hours, according to COMEX data. It is down 2.14% from a month ago and 19.3% below the 52-week intraday high of $5,597.23 set on Jan. 29. Silver followed gold lower, with both metals facing headwinds from a stronger dollar and rising bond yields.
Friday's US nonfarm payrolls report is the next catalyst. A stronger-than-expected print would reinforce the case for higher-for-longer rates, potentially pushing gold toward the $4,400 support level. The metal has gained 4.62% year to date and 33.53% over the past 12 months, outperforming the S&P 500's 27.98% return in the same period.
Oil Rally Reshapes the Inflation Calculus
Brent crude's advance above $80 per barrel has reignited concerns that disinflation is stalling, a scenario that historically pressures gold by raising the opportunity cost of holding the metal. The inverse relationship between real yields and gold has reasserted itself in recent sessions, with the 10-year Treasury yield climbing 8 basis points this week.
The move comes as traders weighed conflicting US-Iran headlines and stronger-than-expected eurozone inflation data, which added to global rate-hike anxiety. Central bank gold buying, a key demand driver in 2025, has slowed as institutions adjust to the shifting rate outlook, according to the World Gold Council's latest survey.
Jobs Data Looms as the Next Test
Economists expect the US economy added 185,000 jobs in May, with the unemployment rate holding at 4.1%. A print above 200,000 would likely push gold below $4,450, while a miss below 150,000 could trigger a relief rally toward $4,600, traders said.
Gold's 52-week low of $3,248.98, set in mid-2025, highlights the metal's 39% rally from that trough. At current levels, gold trades at a premium to JP Morgan's mid-2026 forecast of $4,000, suggesting limited upside absent a sharp deterioration in the economic outlook.
This article is for informational purposes only and does not constitute investment advice.
