Gold Gains Ground on Jobs Disappointment but Remains Boxed In by Fed and Hormuz

Gold rose 2.15% to $4,131 after weaker-than-expected ADP data, but remains 26.58% below January's record due to hawkish Fed and the Hormuz blockade; focus now on Friday's payrolls report.

A weaker-than-expected US jobs report hauled gold back above $4,100 on Thursday, yet the metal is still nursing a 26% slide from its January peak as a hawkish Federal Reserve and the protracted Hormuz blockade cap any sustained rally. The spot price settled at $4,131.20 per troy ounce, a 2.15% advance from Wednesday’s close of $4,044.20, after ADP data showed the private sector added just 98,000 jobs in June — well short of the 118,000 economists had pencilled in and down from May’s 122,000.

The rebound pulled gold 5.89% above its 52-week low of $3,901.30, but it remains 26.58% below the record $5,626.80 hit in January. The 50-day moving average of $4,425.61 sits well out of reach, and the relative strength index of 42.6 points to neither overbought nor oversold conditions — leaving room for further swings.

Investors are now turning to the official US payrolls report due Friday. Kevin Warsh, the outgoing Federal Reserve chair candidate, argued that inflation expectations and associated risks have moderated in recent weeks and that gold may have already put in a short-term bottom — provided Friday’s data does not blow past forecasts.

That fragile optimism clashes head-on with the broader macro picture. The Fed’s latest dot plot showed a majority of policymakers expect interest rates to rise before the end of 2026, with some even projecting two quarter-point increases. The federal funds rate remains anchored at 3.5%–3.75%, while the yield on 30-year Treasury bonds has climbed to around 5%, strengthening the dollar and sapping the appeal of non-yielding bullion.

Adding to the headwinds is the continued closure of the Strait of Hormuz, now in its 123rd day. Though daily commercial transits have crept up to 34 from near-zero at the height of the crisis, that is still a fraction of the pre-war average of 100. Eight of the world’s largest container lines continue to reroute around the chokepoint, and mine hazards keep operators on high alert.

Recent back-channel talks in Doha between the US and Iran, mediated by Qatar and Pakistan, yielded what the Qatari foreign ministry called “first progress” on points from the June ceasefire — particularly concerning shipping through the strait and frozen Iranian assets. Yet there was no breakthrough on a permanent political settlement, and the next round will not take place until after the mourning ceremonies for the late revolutionary leader Ali Khamenei, which run through July 9. His successor, Mojtaba Khamenei, has already taken over as supreme leader. The impact has been felt in oil markets, where falling crude prices reflect hopes of easing tensions, but that same dynamic erodes gold’s safe-haven premium.

Wall Street’s major banks are not betting on a sustained recovery. Citigroup trimmed its three-month target to $4,000 and warned that a prolonged Hormuz blockade could drive prices to $3,500. Goldman Sachs cut its year-end 2026 forecast to $4,900, while J.P. Morgan lowered its annual average estimate to $5,243 (though it still sees a $6,000 close for the fourth quarter). The Deutsche Bank slashed its third-quarter target by more than 22% to $4,300.

In the futures market, commercial hedgers have amassed roughly 260,000 short contracts, a defensively bearish posture that underscores the lack of conviction in any near-term turnaround. Traders are closing existing positions rather than placing fresh bets.

For the moment, gold is caught between a fading geopolitical risk premium and rising expectations that the Fed will ease policy later this year. The 27.20% annualised volatility suggests larger daily swings are likely in the sessions ahead. Which force wins out will hinge on Friday’s jobs report and whether the Doha talks can clear the path through Hormuz before the summer ends — or, as Citi’s worst-case scenario warns, leave the metal exposed to a slide back toward $3,500.