The precious metal is trading at around $4,365 per ounce, its lowest level since March 26, after having long benefited from geopolitical tensions and expectations of a more accommodative Federal Reserve. The downward trend is hitting the rest of its sector too, with marked pullbacks in silver, platinum, and palladium, signaling a broader adjustment across precious metals.

The momentum shifted following the release of a series of stronger-than-expected US economic data. Official employment figures showed 172,000 job creations in May, with the unemployment rate holding steady at 4.3%, while figures for previous months were revised upward. ADP data, based on the payrolls of over 26 million Americans, also confirmed an improvement in private employment, with the 3-month average of job gains reaching its highest level since early 2025.

Beyond the labor market, several indicators suggest that the consensus underestimated the strength of economic activity. Citigroup's Economic Surprise Index reached its highest level since the summer of 2023, while the Dallas Fed's Weekly Economic Index has been accelerating since the start of the year, returning to its fastest growth rate since late 2022. Consequently, the 10-year Treasury yield climbed back to around 4.54%, as markets now assign a majority probability to at least one rate hike by the end of 2026.

This re-acceleration complicates the Fed's path forward, with inflation remaining near 3%. For gold, a non-yielding asset, the rise in real rates mechanically reduces its relative investment appeal, even in an environment still full of geopolitical risks.