Gold Sinks as Payrolls Surge and Hormuz Thaw Overwhelm Central Bank Support
05.06.2026 - 21:46:04 | boerse-global.de
Gold suffered a brutal session on Friday, with the spot price plunging as low as $4,364 – a 3.09% single-day rout – after earlier trading at $4,435, down 1.5% from the prior close. The metal was caught in a pincer movement between two powerful headwinds: a blockbuster US jobs report that nearly locked in a 2026 rate hike, and mounting hopes for a reopening of the Strait of Hormuz, which threatens to evaporate the geopolitical risk premium that had buoyed bullion for months.
The May payrolls data smashed expectations, driving swap-market probabilities for another Federal Reserve rate increase next year to almost 99%. A strengthening dollar and rising bond yields compounded the pain for gold, a non-yielding asset. The sell-off was broad and violent: the SPDR Gold Shares ETF bled $1.14 billion over five trading days, pushing its holdings down to 1,027 tonnes. Simultaneously, signals from former President Trump that a memorandum to reopen the Strait of Hormuz could be signed as early as the week of June 9 sent oil prices – recently above $100 a barrel – sharply lower, undercutting one of gold’s key inflation-hedge arguments. Since the Iran conflict erupted on February 28, only four ships per day had been passing through the chokepoint, down from over 120 before.
Yet at the very moment financial investors were stampeding for the exits, the structural forces underpinning gold have arguably never been stronger. According to the European Central Bank’s latest annual report on the international role of the euro, gold now accounts for 27% of global central bank reserves, vaulting past US Treasuries at 22% – a historic reversal that reshapes the hierarchy of reserve assets. While dollar-denominated assets still command a 42% share, the de-dollarization drive led by China, Poland, Turkey, and India shows no sign of slowing. Poland added 14 tonnes in April alone, and China extended its buying streak to 18 consecutive months. The People’s Bank of China purchased eight tonnes in April, its largest monthly haul since December 2024. For the first quarter of 2026, central banks net acquired 244 tonnes globally – an annualized pace of nearly one tonne per month – building on the 863 tonnes banked in all of 2025, well above the long-term average.
Should investors sell immediately? Or is it worth buying Gold?
The market is now pricing a new reality of prolonged high interest rates, a strong dollar, and strategic central bank accumulation that sits on one side of the ledger while short-term momentum leans the other. Technically, the decline has pushed the relative strength index to 35, deep into oversold territory that historically favors a bounce. Analysts are watching the $4,381 level closely: a hold there could spark a recovery toward $4,589, while a decisive break opens the door to a correction extending as low as $4,094. The record high of $5,627 set in January remains a distant memory. With the new Fed chair Kevin Warsh still calibrating his policy stance and a potential Hormuz deal on the horizon, the coming week will test whether the central bank buying floor can withstand the gravity of a hawkish macro environment. For now, gold remains up 2.2% year-to-date despite losing nearly 3% over the past seven days.
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