Gold futures gave up early gains to dip below $3,350 per ounce, as a stronger-than-expected US jobs report eased fears of a sharp labor market downturn amid President Donald Trump’s escalating tariff war.
Gold eases after strong jobs report
The US economy added 139,000 jobs in May—outpacing forecasts of 130,000—while April’s figure was revised down to 147,000. The unemployment rate held steady at 4.2%, and wage growth came in at 3.9%, above the expected 3.7%, signaling underlying resilience in the labor market.
The upbeat data helped strengthen the US dollar and pushed Treasury yields higher, reducing the appeal of non-yielding assets like gold. Investors interpreted the numbers as a sign that the Federal Reserve may have more room to maintain or even tighten monetary policy, which further weighed on the yellow metal.
Trump-Xi call lifts market sentiment
In addition to economic data, market sentiment was lifted by news that President Trump held a long-awaited phone call with Chinese President Xi Jinping. During the call, both leaders agreed to resume trade negotiations that had previously stalled due to mutual accusations of broken commitments, raising hopes of a potential de-escalation in the US-China trade conflict. While the outcome of the renewed talks remains uncertain, the mere willingness to return to the negotiating table was enough to buoy risk appetite and further curb demand for traditional safe-haven assets.
Despite Friday’s pullback, gold remains up about 2% for the week, supported by persistent concerns over global trade disruptions and continued demand for hedges amid volatile equity markets. Safe-haven flows were particularly strong earlier in the week after the US imposed a sweeping 50% tariff on steel and aluminum imports, sparking fears of retaliatory actions from major trade partners and adding to broader geopolitical uncertainty.
