Iran flare-up erases gold rally after weak US jobs

Gold dropped about 1.6% after President Trump declared on July 8 that Iran’s ceasefire had ended, erasing gains that followed a weak U.S. jobs report. Silver fell about 4.3%, trading near $59.70 an ounce by the end of the week.

The Bureau of Labor Statistics reported 57,000 nonfarm payrolls added in June, well below the roughly 110,000 economists had expected. The BLS also revised April and May job totals lower by a combined 74,000 and reported the unemployment rate rose to 4.2%. The weak jobs print pushed the dollar lower and helped lift gold and silver early in the week, with futures briefly rising above $4,200 to as high as $4,215.50 on Monday.

On July 8, after the president’s announcement that the ceasefire was over, renewed strikes linked to shipping in the Strait of Hormuz were reported. Oil prices rose and U.S. Treasury yields moved higher. Gold futures opened near $4,106.50 on July 8 and fell to an intraday low of $4,032.50 the same day. Silver futures fell to near $58 an ounce in some sessions and closed down about 4.55% at $58.54 on that session.

On July 10 the president wrote on Truth Social: “Orders have already been given, and the U.S. Military is ready, willing, and able, for a one year period of time, subject to extension, to completely decimate and destroy all areas of Iran.” The Federal Open Market Committee minutes released that week showed a divided committee focused on inflation that had not fully cooled. Market pricing put the probability of a September rate hike near 50%.

Metals rebounded on July 9 as physical buyers entered the market. Gold futures rose about 1.43% to close at $4,140.80 and silver gained roughly 3.77% to about $60.75. Dealers reported firmer premiums for bars and coins in hubs including Dubai, Shanghai and India during the dip. Spot gold was trading between about $4,108 and $4,120 by the weekend, while spot silver settled near $59.70 to $59.75.

More than half of global silver demand comes from industrial uses such as electronics, solar panels and electric vehicles. The gold-to-silver ratio widened during the selloff and finished the week around 67 to 70.

Analysts and traders noted central bank gold purchases continued to provide background support. Gold repeatedly tested support in the $4,000 to $4,100 range and faced resistance between $4,150 and $4,200 after the early-week spike. Market participants are awaiting the upcoming Consumer Price Index report as the next major data point that could influence Federal Reserve policy expectations and affect precious metal prices.

For the week ending July 10, gold was down roughly 1.3%–1.6% from its level on July 5, and silver was down about 4.3%.