Gold prices moved lower during Friday’s European trading session, June 6, extending losses toward a weekly low as investors reacted to ongoing uncertainty surrounding negotiations between the United States and Iran. Market participants are also turning their attention to the highly anticipated US employment report, which could influence the next move for both the US Dollar and precious metals.
The decline in gold comes amid growing doubts over the possibility of a near-term resolution to tensions in the Middle East. Iran’s Foreign Minister, Abbas Araghchi, stated that negotiations aimed at ending the conflict have shown no meaningful progress. Although diplomatic communication channels with Washington remain open, he warned that any Israeli military action against Beirut could reignite direct confrontation between the United States and Iran.
The comments contrasted with a more optimistic assessment from Donald Trump, who recently described ceasefire negotiations as being in their final stages. Despite those remarks, tensions remain elevated across the region. Earlier this week, Iran launched missiles and drones targeting Kuwait and Bahrain following a US strike on an oil tanker linked to the Islamic Republic. The attacks reportedly resulted in casualties and injuries, further intensifying geopolitical concerns.
Persistent uncertainty surrounding the conflict has increased fears of supply disruptions and inflationary pressure. These concerns have pushed bond yields higher while supporting the US Dollar, creating a challenging environment for gold, which does not generate interest income.
According to Bart Melek of TD Securities, inflation expectations driven by supply-related shocks have strengthened the US Dollar and encouraged markets to consider the possibility of another Federal Reserve rate hike in late 2026. Rising interest rate expectations typically reduce the appeal of gold, as investors can earn higher returns from yield-bearing assets.
Attention now shifts to the latest US labor market data. Economists expect the May Nonfarm Payrolls report to show the addition of 85,000 jobs, while the unemployment rate is forecast to remain unchanged at 4.3%. A weaker-than-expected employment reading could pressure the US Dollar and provide short-term support for gold prices. Conversely, stronger labor market figures may reinforce expectations for higher interest rates and extend downside pressure on the precious metal.
From a technical perspective, gold remains under bearish pressure. On the daily chart, XAU/USD continues to trade below its 100-day moving average and beneath the midpoint of the Bollinger Bands, signaling that the broader downtrend remains intact.
The Relative Strength Index currently sits near 40, indicating weak momentum without yet reaching oversold conditions. This suggests sellers remain in control, while still leaving room for additional downside movement before the market becomes technically stretched.
Immediate resistance is located around $4,545 near the Bollinger Bands midpoint. Additional resistance levels are found near $4,715 at the upper Bollinger Band and around $4,795 at the 100-day moving average. On the downside, key support is positioned near $4,370. A decisive break below this level could trigger a deeper correction, while holding above support may allow prices to stabilize and consolidate in the near term.
