Gold Slides on Robust U.S. Jobs Data as Fed Rate Cut Hopes Fade; Silver Hits 13-Year Peak
Friday, June 13th 2025
A stronger-than-expected U.S. employment report rattled the gold market on Friday, sending prices down over 1% and pushing back expectations for Federal Reserve rate cuts. Meanwhile, silver surged to levels not seen since 2012, fueled by speculative buying and its relative value to gold.
Solid Jobs Report Weighs on Gold Sentiment
Spot gold dipped 1.1% to $3,316.13 per ounce by mid-afternoon Eastern Time, snapping its upward momentum despite a 0.8% gain for the week overall. U.S. gold futures also ended the session down 0.8% at $3,346.60.
The market reaction followed fresh data from the U.S. Labor Department, which showed that non-farm payrolls rose by 139,000 in May—beating economist expectations of a 130,000 increase. The unemployment rate held steady at 4.2%, aligning with forecasts.
According to Edward Meir, analyst at Marex, the numbers suggest the Federal Reserve is likely to hold interest rates steady for a while longer. “The data coming in as expected doesn’t help gold—it reinforces the view that the Fed won’t be rushing into any rate cuts soon,” Meir explained.
Rate Cut Odds Diminish
Market sentiment around Fed policy shifted swiftly after the report. Futures pricing now indicates investors largely anticipate the first rate cut in September, with only one more possible by the end of the year. Hopes for a third cut, once seen as plausible, have significantly diminished.
This matters for gold because higher interest rates typically make the non-yielding metal less attractive to investors. While gold retains its traditional role as a hedge against inflation and geopolitical risks, rate hikes or prolonged policy tightening tend to dull its luster.
Silver Defies Gravity Amid Speculative Surge
In contrast to gold’s retreat, silver continued its breakout run. Though spot silver eased 0.5% to $35.96 by the end of the session, it had earlier touched its highest level since 2012.
UBS analyst Giovanni Staunovo attributed the surge to aggressive speculative interest. “Silver’s jump appears driven by its perceived undervaluation relative to gold. The move past the $35 mark triggered additional momentum buying,” he said.
Other Precious Metals Climb
While gold struggled, other metals benefited from broader bullish sentiment. Platinum jumped 2.5% to $1,158.20, marking its highest level since March 2022. Palladium also advanced, climbing 3.9% to $1,045.45. Both metals were poised for solid weekly gains.
Trade Policy Uncertainty Lingers
Adding to the complex macro backdrop was the unresolved trade conversation between U.S. President Donald Trump and Chinese President Xi Jinping. Despite a much-anticipated call, little concrete progress was made. Marex’s Meir noted that any escalation in trade tensions could ultimately benefit gold: “If tariff headlines turn negative, that could reignite safe-haven demand.”
