Gold Falls to 2026 Low After US Jobs; Banks Stay Bullish

Gold fell 3.27% to $4,339 on Monday, its lowest price in 2026, after the US economy added 172,000 jobs in May, roughly double the 85,000 economists had forecast. The payrolls report strengthened the dollar, pushed Treasury yields higher and led markets to price about a 68% chance of a Federal Reserve rate increase by December.

Rising yields increase the opportunity cost of holding gold, which does not pay interest, and helped trigger the sell-off. Markets that had priced three rate cuts for 2026 shifted to a view that includes at least one possible hike.

Cleveland Federal Reserve President Beth Hammack said the central bank “may need to act soon to bring inflation back to 2%.”

The one-day drop erased the metal’s gains for the year. The stronger dollar and higher yields directed capital toward yield-bearing instruments, reducing immediate demand for bullion.

Major banks kept their year-end price forecasts after the decline. Goldman Sachs projects $5,400. JPMorgan’s target range is $6,000 to $6,300. Deutsche Bank sees $6,000 and UBS expects $5,900. Those estimates imply roughly 23% to 44% upside from current levels.

The banks cited ongoing central bank purchases, shifts by sovereign wealth funds away from dollar-denominated reserves and a geopolitical risk premium as factors supporting higher prices over the medium term.

Traders and portfolio managers will watch upcoming inflation and employment data and any Federal Reserve guidance for signs that could change rate expectations and affect gold prices.