Gold prices eased on Tuesday after a strong run last week, with spot bullion trading near $4,147.94 per ounce, down about 0.41% from the previous session, according to Trading Economics data. Earlier in the morning, gold was quoted at $4,166 per ounce at 9:05 a.m. Eastern Time, per Fortune's daily gold report. Silver, meanwhile, held onto most of last week's gains, trading above $61 an ounce after briefly topping $62 on Friday, its highest level since June 23.
The consolidation follows a sharp rally driven by softer U.S. labor data and a weaker dollar, both of which have prompted traders to reassess the Federal Reserve's next move.
Weak Jobs Report Reshapes Rate Expectations
The catalyst for last week's precious metals rally was a disappointing June jobs report. U.S. nonfarm payrolls grew by just 57,000 in June, the smallest increase in four months and well below the 110,000 forecast by economists. The soft print rattled expectations for further Fed tightening and pulled the U.S. dollar sharply lower, with the greenback headed for its largest weekly drop since April.
"Weaker-than-expected US jobs data and lower oil prices led traders to scale back expectations for Federal Reserve interest rate hikes," CNBC reported, noting that silver's roughly 6% weekly gain was fueled almost entirely by the shift in rate-path pricing.
Gold, which had spent much of June hovering near the $4,000 mark, has now decisively broken above that psychological level. CNBC's June 25 analysis had questioned whether "the shimmer worn off the precious metal rally," but last week's data appears to have reignited safe-haven demand.
Fed Holds Steady, Signals Possible Hike
The rate-cut narrative that dominated earlier in the cycle has now given way to a more hawkish backdrop. At the June 16–17 FOMC meeting — the first chaired by new Fed Chair Kevin Warsh — policymakers voted unanimously to keep the federal funds rate at 3.50%–3.75%. The statement dropped any easing bias and signaled a potential 25 basis point hike later in 2026, citing solid growth and inflation still running above the Fed's 2% long-term target.
The updated dot plot underscored the hawkish shift: nine of 18 Fed officials projected at least one rate hike by year-end. However, the June jobs data has muddied that outlook. CME FedWatch data from late June showed a 62.6% probability that the Fed holds rates steady at the July 28–29 meeting, versus a 37.4% chance of a 25 basis point hike — odds that have likely tilted further toward a hold after Friday's payrolls print.
Geopolitics and Oil Also in Play
Beyond monetary policy, geopolitical developments continue to shape sentiment. Traffic through the Strait of Hormuz has been steadily recovering following the implementation of the interim U.S.–Iran peace agreement, which has pulled oil prices lower. Softer crude has helped ease headline inflation concerns — a bullish input for non-yielding assets like gold — while reducing one of the tail risks that had supported bullion earlier in the year.
For now, precious metals sit at a crossroads. With the July FOMC meeting three weeks away and CPI data on deck, traders are watching every incoming data point for signs the Fed's hawkish tilt is being tested by softening labor demand.
Sources: CNBC, Fortune, Trading Economics, Yahoo Finance