Gold’s Nervous Pause: Blockbuster Payrolls Weigh as Central Bank Buying and CPI Provide Counterbalance

Gold at $4,352.90 pressured by US jobs data selloff, supported by central bank buying. Key level $4,250; market awaits Wednesday's CPI report for direction.

Gold is treading water at $4,352.90 an ounce, caught between a punishing selloff sparked by red-hot US jobs data and a sturdy floor built by central bank accumulation. Traders are holding their breath ahead of Wednesday’s consumer price index release, which will set the tone not only for the yellow metal but for the broader commodity complex. The market’s indecision reflects a tug-of-war between near-term macro headwinds and longer-term structural demand.

The blow came last week when the US economy added 172,000 new jobs in May — more than double the 85,000 consensus estimate. That shock dashed hopes for imminent Federal Reserve rate cuts and sent the dollar and bond yields soaring. The yield on the 10-year Treasury jumped to 4.536%, raising the opportunity cost of holding non-yielding bullion. Gold shed 3.6% on the week, and the selling pressure was most acute on Friday, when the metal briefly tumbled below the 200-day moving average. The relative strength index now sits at 34.4, flirting with oversold territory and raising the possibility of a short-term bounce.

But the selloff has not drained all conviction. The SPDR Gold Shares, the world’s largest physically backed gold ETF, has seen accelerating outflows — a sign of speculative capitulation. Yet beneath that surface lies a powerful countercurrent: central banks remain voracious buyers. In the first quarter of 2026, they purchased 244 tonnes of gold net, with Poland and Turkey leading the charge. The Reserve Bank of India recently repatriated significant holdings from London vaults, underscoring a global shift away from dollar-denominated reserves. In some segments of foreign exchange reserves, gold’s share has climbed to 27%, while US Treasuries have slipped to around 22%.

These institutional purchases provide a support level that could prove decisive this week. Technicians identify $4,250 as the key line in the sand; a break below that would open the door to further downside. Meanwhile, longer-term forecasts remain strikingly bullish. JPMorgan sees gold reaching $6,300 by year-end, and Goldman Sachs reiterated its $5,400 target after the March pullback. The chasm between short-term pain and long-term optimism has rarely been wider.

All eyes now turn to Wednesday’s CPI report for May. April inflation came in at 3.8%, the highest since May 2023, with energy prices contributing over 40% of the monthly gain. A hot print would reinforce the hawkish narrative and likely send gold below $4,250. A cooler number, however, could rekindle rate-cut bets and fuel a recovery back toward resistance at $4,400. The Fed’s two-day meeting begins on June 16, and markets are pricing a 99% probability of no change at that gathering, with the rate corridor steady at 3.50%–3.75%. But the probability of a rate hike by year-end has crept up to around 30%, according to fed funds futures.

Kevin Warsh, the new Fed chair, will deliver his first press conference after the decision. His tone on inflation and the path of rates will be scrutinized for any hint of a pivot. For now, gold is locked in a waiting game — one that pits a resilient economy and rising yields against the quiet but relentless buying of the world’s central banks. Wednesday’s inflation data will tip the scales one way or the other.