Gold fell early Monday on rising speculation that the Federal Reserve will boost interest rates because it will need to rein in the high prices of goods following the war in Iran.
Bets on an interest rate hike this year increased after a blowout U.S. monthly jobs report for May, which came out Friday. Higher interest rates are typically bearish for gold, making it a less attractive alternate investment. The yellow metal also came under pressure on a military escalation between Iran and Israel, which sent investors to other haven assets like the dollar. Gold has declined since the start of the war.
August gold futures tumbled 5% last week to settle at $4,365.30 an ounce on Comex, after the most-active contract fell 3.1% Friday. Bullion dropped 0.8% in May after losing 1% in April and sliding 11% in March. It rallied 64% last year. The August contract is currently down $10.20 (-0.23%) an ounce to $4355.10 and the DG spot price is $4323.10.
The U.S. added 172,000 jobs in May, according to Labor Department data released Friday, much more than expected. Nonfarm payrolls were expected to rise 80,000, based on economists’ estimates. The unemployment rate held at 4.3%, in line with expectations.
Fed policymakers watch both inflation and the labor market when setting monetary policy. A weak labor market can sometimes keep the Fed from tightening monetary policy to combat inflation because of concerns that such a move will hurt hiring.
Inflation has climbed to the highest levels in almost three years in recent months as the conflict in Iran has spurred oil prices and the dollar, making gold a less attractive alternate investment.
Over 98% of the investors tracked by the CME FedWatch Tool are betting on rates staying unchanged later this month, but most anticipate a rate hike by October. The Fed has kept interest rates unchanged this year after three previous rate cuts. The Fed in April held interest rates steady at 3.5% to 3.75%, as expected, but policymakers were unusually divided. The June 16-17 meeting of Fed policymakers will be the first under new Chair Kevin Warsh.
Iran launched missiles at Israel early Monday, in what the Associated Press said was the first such bombardment since a ceasefire began in April. The escalation could derail U.S. President Donald Trump’s attempts to broker a peace deal with Iran.
Front-month silver futures slid 8.9% last week to settle at $69.10 an ounce on Comex after the July contract declined 6.6% Friday. The most-active contract touched a record above $115 in January. Silver gained 2.5% in May after losing 1.2% in April and dropping 20% in March. It rose 141% last year. The July contract is currently down $0.458 (-0.66%) an ounce to $68.645 and the DG spot price is $68.11.
. 1334Spot palladium fell 9.9% last week to $1,254.40 an ounce. It dropped 5.8% Friday. Palladium fell 12% last month after rising 3.2% in April and tumbling 17% in March. Palladium rose 74% last year.
Spot platinum decreased 8.5% last week to $1942 an ounce. It lost 5.7% Friday. Platinum dropped 3.2% in May after gaining 1.3% in April and declining 17% in March. Platinum increased 122% in 2025.
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