Why Is Gold Pulling Back Despite Staying Above $5,000-Are Strong US Jobs Data Delaying Rate Cuts?

Source: Kapitales Research

Highlights:

• Gold prices slipped to around $US5061.73 an ounce at the time of writing as strong US jobs data reduced expectations of near-term Federal Reserve rate cuts.
• Robust payroll growth and a lower unemployment rate strengthened the US dollar and bond yields, pressuring the non-yielding precious metal.
• Despite the pullback, analysts remain bullish, with some banks forecasting gold could climb toward $US6000 by year-end amid geopolitical risks and strong investor demand.

Gold prices edged lower after a strong US labour market report reduced expectations of an early Federal Reserve rate cut, cooling investor demand for the safe-haven metal. The pullback comes after bullion recently touched record highs, highlighting how sensitive precious metals remain to shifting interest-rate outlooks and macroeconomic signals.

Strong Jobs Data Weighs on Gold Momentum

Gold retreated as much as 0.8% after a robust US payrolls report showed employment growth at its strongest pace in more than a year, while the unemployment rate unexpectedly declined. The data reinforced expectations that the Federal Reserve may keep rates higher for longer, which tends to pressure non-yielding assets like gold. Reports from Bloomberg and other outlets confirmed the move has been widely covered across global financial media, with traders pushing back rate-cut bets to later in the year. Spot gold slipped about 0.5% to roughly $US5061.73 an ounce at the time of writing, although prices continued to hold above the key $US5000 level following a volatile start to the month.

Volatility Follows Record Rally

Despite the recent decline, gold remains elevated after reaching a record high above $US5595 an ounce in late January before a sharp correction wiped out around 13% in two sessions. Analysts say the recent retreat reflects profit-taking and a shift in interest-rate expectations rather than a fundamental change in the broader bullish outlook. Market watchers note that stronger employment data typically supports the US dollar and bond yields, both of which can reduce demand for precious metals.

Long-Term Outlook Still Positive

Many banks remain optimistic about gold’s longer-term trajectory, citing geopolitical risks, diversification away from traditional assets and continued central-bank buying as key drivers. Some forecasts suggest bullion could climb toward $US6000 by year-end if macro conditions remain supportive. For now, the latest jobs report has paused gold’s momentum — but analysts say the broader rally could resume once markets gain clearer signals on future interest-rate cuts.

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