Gold & Silver Slump as Fed-Hike Bets Roar Back
Strong US jobs data lifted yields and revived Fed-hike bets, wiping out gold's 2026 gains and crashing silver 7.8%. TD Securities cut its H2 forecasts.
A Jobs Shock the Metals Couldn't Absorb
Friday's payrolls report tore up the precious-metals playbook. The US economy added 172,000 jobs in May, more than double the 85,000 consensus. Gold buckled, sliding below $4,370 an ounce — its lowest print of 2026 — and in doing so handed back its entire year-to-date gain. On the week, bullion shed close to 4%. Silver took the harder blow, cratering 7.8% to $68.16, its weakest level since late March.
Real Yields Do the Damage
The logic is blunt: a hot labour market shrinks the case for cuts and reopens the case for a hike. Markets are now pricing a quarter-point increase by year-end, with December odds above 50%. For an asset that pays no coupon, rising real yields are kryptonite. Bonds sold off in sympathy — 10-year US Treasury yields pushed above 4.50% and German Bunds above 3.00%, both two-week highs — while a firmer dollar piled on.
TD Securities Trims Its Targets
TD Securities' commodity desk, led by Bart Melek, cut its second-half gold forecasts. The bank now sees Q3 averaging $4,550 (down 3%) and Q4 averaging $4,700, a 10% reduction. Melek pins the move on higher inflation expectations from negative supply shocks, which have lifted yields across the curve and kept the dollar firm. If oil holds above $100 a barrel — TD's base case — a test of $4,000 can't be ruled out.
How to Trade It
The nuance matters: this is not a top call. TD actually raised its longer-term targets and expects a recovery from Q2 2027. But for the months ahead, the macro backdrop is squarely against the metals. As long as real yields and the dollar grind higher, rallies in gold are there to be sold. Silver stays the higher-beta expression in both directions — anyone fading the move has to stomach the wider swings. The next genuine catalyst is the Fed meeting; until then, the rates story is in the driver's seat.