Gold and Silver Surge Higher After U.S. Jobs Growth Hit the Skids in June

Gold and silver popped higher following news that the U.S. economy added far fewer new jobs than expected in June. The disappointing news revealed that only 57,000 new jobs were created last month, versus the 113,000 economists had expected to see at the mid-point of the year.

Job growth in April and May was also revised down a total of 74,000, the Department of Labor said.

Gold gained more than 2%, climbing above $4,065, while silver traded above $60 an ounce. The stock market fell on the news.

The June jobs report was a stark reversal from recent months which saw fairly strong numbers, especially as April and May were revised lower.

The jobs report took center stage for financial markets as the recent narrative has focused around inflation—which remains high and above the Federal Reserve’s 2% target. If the jobs market continues to slow down, it lowers the chances the central bank will raise interest rates anytime soon.

Digging deeper into the June jobs report, the number of hours worked last month declined, indicating an upcoming slowdown in broader economic activity.

Key takeaway?

What is means for the Fed: The cooler jobs growth and the recent decline in energy prices takes pressure off the Federal Reserve to hike interest rates in the next several months, which is a positive for gold. Wall Street largely expects the Fed to hold interest rates steady at its July meeting.

Precious metals also gained steam from Federal Reserve Chairman Kevin Warsh’s remarks this week that dampened ideas the Fed could hike interest rates in 2026 to combat rising inflation. Gold has been tracking expectations for Fed monetary policy for months.

Fed Chairman Warsh said “inflation risks have come down” at a European Central Bank conference in Portugal. Historically higher borrowing costs are a challenge for non-interest paying precious metals—so Warsh’s comments were seen as supportive to gold.

The historic run in gold took a breather in recent months, but if you look at a 10-year chart you can see the long-term uptrend remains intact. Gold has been testing a key support zone in the $4,000 area and recent action shows eager buyers at this level.

Many on Wall Street and around the globe believe this recent pause in the gold rally was simply a breather, not an end to the long-term uptrend. In a recent research report, European asset management firm Incrementum AG wrote “The future of money lies in its past. ” The firm described gold as an increasingly important monetary anchor as the post-1971 global fiat currency system reveals “unmistakable signs of fatigue.”

“The Pax Americana — that political, military, economic, and above all monetary order that has shaped the global system since 1945 — is drawing to a close,” the report said.

Gold is serving as a neutral reserve asset in the rapidly changing global order. What’s more, the historic role of government bonds as a “risk-free asset” is quickly dissolving as inflation-adjusted returns sink to deeply negative levels. This is creating an environment where investors are seeking alternative stores of value, and are shifting out of U.S. Treasuries into gold.

The firm pegged a target of $8,900 for gold by the end of the decade, or less than four years from now.