Strong US jobs print erases gold’s 2026 gains; banks stay bullish

A stronger-than-expected US jobs report for May — 172,000 payrolls added versus an 85,000 consensus — lifted the dollar and pushed spot gold down 3.27% to $4,339 on Friday, erasing the metal’s gains for 2026.

The report led bond markets to price about a 68% chance of a Federal Reserve rate increase by December and pushed Treasury yields higher, increasing the opportunity cost of holding non‑yielding assets such as gold. Markets had entered 2026 pricing three rate cuts; the payrolls figure reversed that outlook.

Cleveland Fed President Beth Hammack commented the central bank “may need to act soon to bring inflation back to 2%,” reflecting officials’ concern about persistent inflation.

Major Wall Street banks did not change their year-end price forecasts after the sell-off. Goldman Sachs maintains a $5,400 year-end target. JPMorgan projects $6,000 to $6,300. Deutsche Bank’s target is $6,000, and UBS expects $5,900. Those targets imply roughly 23% to 44% upside from Friday’s level.

The banks cite sustained central bank buying, a shift by some sovereign wealth funds away from dollar-denominated reserves, and a geopolitical risk premium as factors supporting their longer-term gold outlook.

Analysts described the recent drop as a valuation reset rather than a change in underlying demand, and noted that continued central-bank purchases and reserve diversification would be important to monitor alongside US policy moves.

Traders and institutional investors will watch incoming inflation readings, further labor-market data and comments from Federal Reserve officials for signals on policy direction that could influence gold’s path as yields evolve.