Gold Drops Sharply After Robust US Payrolls Data Sinks Rate-Cut Expectations

Gold prices tumbled on June 5, 2026, as unexpectedly strong US nonfarm payrolls data pushed the dollar higher and dimmed prospects for near-term Federal Reserve interest-rate cuts. Spot gold fell 2.1% to $2,320 per ounce by 18:30 UTC, its steepest single-day decline in four weeks. The Labor Department reported employers added 287,000 jobs in May, far exceeding the 190,000 consensus estimate, while the unemployment rate ticked down to 3.8%. The data underscored labor-market resilience, fueling a rally in the US Dollar Index to 105.6 and lifting 10-year Treasury yields 12 basis points to 4.34%. Higher yields increase the opportunity cost of holding non-yielding assets like gold, while a stronger dollar makes bullion more expensive for overseas buyers. Traders now price just one quarter-point rate cut in 2026, down from two prior to the report.