Gold Gives Up Early Gains as the Dollar Recovers From Weekly Loss

Gold prices reversed early gains on Monday, the dollar recovering from last week’s steep losses. Spot gold traded lower through a choppy European session while gold futures inched up, and the dollar index gained 0.1%. The reversal came after bullion’s first positive week since mid-May, a rally built on Thursday’s weak U.S. jobs data that has now run into fresh dollar resistance.

That bounce, and the dollar’s response to it, now sets up the Federal Reserve minutes due this week as the next test of gold’s 2026 trajectory. Sticky inflation and a still-hawkish Fed rhetoric leave the metal caught in a familiar tug-of-war: a softer-than-expected labor market that weakens the case for another hike, and a central bank that has already signaled one may still be coming.

The full set of forces at play stretches well beyond Monday’s session. A weaker labor market, sticky inflation, a stronger dollar, and a still-cautious Fed together form the backdrop that has weighed on gold all year. Last week’s bounce tested whether the metal could break out of that backdrop. The Fed’s June minutes, due later this week, will give traders the next read.

Dollar Bounce Knocks Gold Off Early-Month High

Gold prices reversed early gains on Monday as the dollar recovered a measure of steep losses from last week. The yellow metal lost steam after rebounding from eight-month lows last week, and the greenback rose from near two-week lows.

Spot gold was trading lower in a choppy European session while gold futures inched up. The pullback came even as oil prices fell, a setup that can ease inflationary pressure and support demand for non-yielding metal. Other precious metals fell in sympathy, with silver and platinum reversing parts of last week’s strong run. Together, those moves tracked a dollar recovery that picked up steam through the European morning.

After the metal’s strongest run in weeks, the dollar’s bounce knocked gold lower. That shift came amid persistent uncertainty over U.S. interest rates, with the Fed’s rate path still unclear after last Thursday’s soft labor market data. Monday’s reversal left the metal caught between last week’s rally drivers and the dollar’s renewed strength. Now traders are watching the minutes from the Fed’s June meeting, due this week. Those minutes will frame the central bank’s view of last week’s jobs print and how much room the Fed has to move on rates.

• Gold’s weekly gain last week: over 2%
• Gold’s Friday spot close: ~$4,182.28/oz
• CME FedWatch Sept hike probability: 53.5%
• Pre-jobs-report probability: ~65%
• Dollar index Monday: +0.1%

Last Week’s Rally Took Its Cue From a Weak Jobs Print

Last Thursday’s U.S. nonfarm payrolls print was the trigger for last week’s gold bounce. The economy added 57,000 jobs in June, well below the 115,000 Dow Jones consensus, with the May figure downwardly revised to 129,000. Markets read the print as a meaningful cooling in the labor market. With the Fed weighing both jobs and inflation when adjusting rates, a softer jobs number weakens the case for more hikes.

Gold rose on Friday morning after the report, ending the week with a 2.3% gain. That marked the metal’s first weekly rise since late May. The rally erased only a slice of the damage from a brutal start to the year. By Monday, that bounce had run into dollar resistance, with Friday’s reporting on the metal’s bounce already in the rearview. Strategists at OCBC said Friday they were ‘cautiously constructive’ on the metal, with the softer payrolls print helping reduce ‘the hawkish tail risk.’ That OCBC shift hinged on jobs data capping real yields and the dollar, conditions that may not hold if the Fed minutes stay hawkish.

Sticky Inflation Still Tilts the Fed Toward a Hike

The Fed’s June 17 rate decision statement held the federal funds rate at 3-1/2 to 3-3/4 percent. That pause reflected an economy expanding at a solid pace, with unemployment little changed. The Committee also flagged that inflation remained elevated relative to its 2 percent goal.

Policymakers signaled during that June meeting that sticky inflation may necessitate at least one rate hike this year. Sticky inflation and a resilient labor market give the central bank more impetus to hike.

Higher rates bode poorly for gold, because they raise the opportunity cost of holding non-yielding assets against government debt. That pressure was a major weight on gold through 2026, dragging the yellow metal well off its January record highs. Even after last week’s bounce, gold remained well below those peaks.

The greenback has bounced back this morning, knocking gold lower. Time will tell if this drop proves to be short-lived, or more significant.

Morrison, Senior Market Analyst at Trade Nation, framed Monday’s move as a dollar story first. A weak U.S. data print gave the metal a brief bid last Thursday, then a stronger dollar pulled it back on Monday, leaving the metal stuck in the same two-sided trade that has defined most of 2026. That back-and-forth has played out repeatedly each time a new inflation reading reset the rate-cut narrative. Gold traders now want to know whether the Fed’s minutes will ease that back-and-forth or deepen it.

The Dollar’s Anchor at 13-Month Highs

The dollar index rose 0.1% on Monday, recovering from a near two-week low hit last week. That bounce reflected traders questioning whether the Fed will raise interest rates this year. A softer-than-expected jobs print had earlier pulled the greenback off its highs.

Despite last week’s losses, the dollar remained in sight of 13-month peaks hit in June. Sticky U.S. inflation has kept the path of interest rates uncertain. The greenback’s strength through most of 2026 has been a headwind for gold priced in dollars. Gold testing the $4,000 floor against a stronger dollar played out earlier in the year as the same tug-of-war intensified. That earlier floor test showed how quickly gold can slip when the dollar catches a bid.

Fed Minutes Test Gold’s New Thesis

The minutes of the Fed’s June meeting are due this week and are expected to offer more insight on the path of interest rates. Traders will parse them for any softening of the central bank’s inflation warning.

Three Catalysts Traders Are Watching

1. The Committee’s reaction to the June nonfarm payrolls print.
2. Any shift in the dot plot signaling the timing of a potential hike.
3. The Committee’s framing of new inflation pressures, with AI-driven price pressures a fresh variable.

Already in the June statement, the Committee flagged inflation as elevated relative to the Fed’s 2 percent goal. A repeat of that language in the minutes would reinforce the hiking tilt. Soften that language, and the rate-cut narrative that drove last week’s bounce could revive. The minutes’ tone will set the direction for the next leg of gold’s 2026 trade. Markets are also parsing how the Committee will reconcile that June inflation warning with this week’s weaker jobs print.

Falling oil prices have eased some of the inflation concerns cited by traders. Rising global temperatures are also expected to factor into higher price pressures, the report noted. These inputs sit alongside the June jobs print as the Fed’s minutes land later this week.

Silver and Platinum Retreat Alongside Gold

Other precious metals retreated alongside gold on Monday. Silver and platinum had been two of last week’s strongest performers. Silver logged a roughly 6.7% weekly gain last week, jumping 2.9% on Friday alone. Platinum rose 2.8% on Friday to around $1,660.10. Both metals pulled back as the dollar recovered on Monday.

Oil prices fell on Monday, which can be a tailwind for industrial metals like platinum, but silver and platinum still reversed last week’s gains. Silver and platinum often follow gold’s lead when dollar moves dominate. The session left all four metals below last week’s highs. The dollar’s recovery, rather than the oil move, drove the broad-based pullback. That linkage keeps gold at the center of the precious-metals narrative. Silver and platinum often act as the higher-beta proxies when dollar moves dominate.

The Long Road Down From January’s Peak

Gold’s monthly decline now stands at 4.11%, according to Trading Economics data. The metal remains 24.05% higher than a year ago despite the 2026 pullback. Trading Economics traces gold’s all-time high at $5,608.35 in January 2026, per the live price and historical data page.

In the three months to June, the yellow metal posted its worst quarter in 13 years, per CNBC’s reporting. Gold was trading at a discount of around 22% from its January all-time high at the start of last week’s session. The pullback reflected concerns about rising inflation, a firmer dollar, and a hawkish turn among central banks after the U.S.-Iran war dented appetite. Even after last week’s bounce, gold remained well below those peaks. Both gold and silver posted record-smashing rallies in 2025, surging 66% and 135% respectively over the course of the year.

Trading Economics’ global macro models and analysts’ expectations project gold at $4,260.77/oz by the end of this quarter. Their 12-month horizon estimate sits at $4,553.08/oz.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Gold prices are subject to significant volatility, and past performance is not indicative of future results. Consult a qualified financial professional before making investment decisions. Figures are accurate as of publication.