Gold and Silver Slip on May Jobs Report Shock

 

Gold and Silver Slip on May Jobs Report Shock

(Bullion News Network) – Prices for gold and silver slipped on Monday after the U.S. jobs data from May came in better than expected. The spot price of gold fell by just under $150 per troy ounce, dipping below the $4,400/ozt line. Silver took an even harder hit, losing more than $5.30/ozt in the metal’s largest single-day loss in months. The price action favored gold, driving the gold-silver ratio more than 5% higher.

Platinum-group metals also struggled to end the trading week. Platinum slid by more than $120 per troy ounce, while palladium lost just under $78/ozt during a market-wide selloff.

The key culprit behind the move seems to be Friday’s U.S. employment report, which significantly outpaced expectations and showed another month of growth in the American labor market. The U.S. economy added 172,000 jobs on Friday, crushing a median forecast of just 85,000 jobs. Friday’s report also revised the April report to show 179,000 jobs, a significant uptake from the already optimistic 115,000 reported in May.

We said earlier this week that Friday’s job report is a major data drop to watch, and this analysis was correct. A strong May labor performance drove Wall Street sharply lower as traders priced in a small possibility of a rate hike in the coming months. Despite the concern, the FOMC is widely expected to leave interest rates unchanged at its June meeting, which will be led for the first time by Fed chair Kevin Warsh.

U.S. President Donald Trump questioned the market’s reaction to the optimistic jobs report in a Truth Social post.

With a great Jobs Report, like just announced, stocks should go up, not down. That’s the way it was for 200 years. Growth does not mean inflation! How else can a Country attain GREATNESS???

CME FedWatch projected the probability of a 25 basis point rate cut at just 3.8% on Friday, down from 4.6% on Thursday but up from 0.4% one week ago. With a strong performance from the jobs market logged in May, the Fed is likely to feel little pressure to risk driving consumer prices higher by cutting rates prematurely at the upcoming meeting.

That being said, traders could begin to see rate cut speculation play a larger role in safe haven demand over time, especially if we see any more notable shocks from either employment or inflation data. Rate cut speculation played a major role in the precious metals market’s price swings throughout 2024 and 2025, but Fed-related volatility has taken a backseat to geopolitical speculation – particularly in Iran – for much of 2026.

Where geopolitics are concerned, talks between the U.S. and Iran continue to drive market speculation. The Iranian Revolutionary Guard said in a statement on Thursday that “there will be no calm in the region” until Israel withdraws its troops from Lebanon, where Israel has continued strikes in an effort against Hezbollah.

Earlier this week, Iranian leaders suggested that further talks between the U.S. and Iran will be contingent on a lasting ceasefire between Israel and Lebanon. Although Lebanon agreed to a ceasefire, the agreement was rejected by Hezbollah, throwing a slew of potential peace talks into jeopardy. Adding to the difficulty of securing a deal, the U.S. and Iran reportedly disagree on several key points, including the future of the Iranian nuclear program, ownership of the Strait of Hormuz, and reparations for the military conflict.

Oil prices retreated again on Friday, shedding around 1.4% to bring the total monthly losses to approximately 22.4%. 

Investors should expect rate cut speculation and news in the Middle East to play dual roles in driving demand for safe haven assets in the coming weeks. Which of these key indicators will take the lead next week? It’s tough to say.

Domestically, next week will see the release of the Consumer Price Index (CPI) for the month of May. This report, combined with Personal Consumption Expenditures (PCE), holds a considerable amount of weight in the Federal Open Market Committee (FOMC) as the board works to determine the federal interest rate. A surprise in this report could drive speculation about either a rate cut or a rate hike, depending on where consumer prices moved in May.

Geopolitics is a bit more tricky to anticipate. Aside from a deadlock in negotiations between Iran and Israel in Lebanon, Iranian leaders this week said that the “ball is in Trump’s court” where peace talks are concerned. According to one of the Iranian supreme leader’s advisors, the U.S. unfreezing Iranian assets is a core prerequisite to any major deal. In Washington, Trump told reporters that “the situation with Iran seems to be going quite well.”

In other words, it should be a busy week when markets reopen on Monday. Upcoming economic data could give traders more quantifiable data about where the U.S. economy – and interest rates – may be heading, but sporadic news out of the US-Iran conflict could jolt a wide range of markets.