Gold was shaping up to have a fairly calm week, but a stronger-than-expected US jobs report sent it well under US$4,400 per ounce as the period came to an end.
Silver also took a hit, dropping below US$69 per ounce.
The report, which shows that nonfarm payrolls rose by 172,000 in May, has further reduced expectations that the US Federal Reserve will cut interest rates.
Beyond that, the Iran war continues to impact gold, with increased conflict in the Middle East and overall uncertainty contributing to its ups and downs this week.
Although the US House has now backed a resolution geared at stopping the war until it's authorized by Congress, the move is seen as largely symbolic.
There's understandably a lot of focus on these day-to-day factors, but this week I heard from Chris Blasi of Neptune Global, who encouraged investors to take a step back and remember the bigger picture for gold. In his view, the metal's key driver isn't going anywhere:
"The (driver) that's most consistent is the expansion of debt. There's charts that show hard correlations between the growth in the US debt and the price of gold. It doesn't move exactly — I mean, it's just about exact, but there's times when the debt is still expanding and gold may not be moving up immediately.
"But so, a person has to ask themselves, right — the thing that would truly hurt gold, in my opinion, in the long run, is if the US actually started paying down their debt, and the debt creation stopped or diminished markedly or materially. And that's just not going to happen — it is not."
Bullet briefing — Central banks buy, Russia makes bold claim
Central banks back in action
Central banks were back in action in April, purchasing a net 17 metric tons of gold.
According to the World Gold Council's data, that's a sizable rebound from March, when they sold a net 30 metric tons of the yellow metal as the Iran war began.
The organization says Poland was the top buyer for April at 14 metric tons, while China was next at 8 metric tons — that's the highest level for the Asian nation since December 2024, and it pushes China's gold-buying streak to an impressive 18 consecutive months.
Turkey, which attracted attention in March for selling 60 metric tons of gold, saw its reserves stay "virtually flat" in April. Its sales were reportedly for FX and liquidity purposes.
Gold reserves outpace treasuries
Underscoring gold's importance to central banks, a new report from the European Central Bank (ECB) shows that the precious metal is now the world's top reserve asset.
Gold accounted for 27 percent of all global central bank reserve assets as of the end of 2025, up from 20 percent the previous year. That puts it ahead of US treasuries at 22 percent.
While the ECB notes that this shift "largely reflects valuation effects," and suggests that moving forward gold will face limitations as a reserve asset, it also notes that central bank gold buying points to a desire to "strengthen balance sheet resilience" as geopolitical risks rise.
But what about the gold that countries are mining, not buying?
This week Russia shared its first gold production estimate since its invasion of Ukraine, with the country's natural resources minister saying 480 to 500 metric tons are expected to be mined in 2026.
The numbers are attracting attention for multiple reasons. For one thing, the amount is about 50 percent higher than the World Gold Council's 2024 Russian gold output estimate; for another, it would place Russia well above China, which is currently the top producer.
In addition to that, Bloomberg states that two executives at Russian gold-mining companies have said they're skeptical about the number. While major producer Polyus is working to bring one of the world's largest gold mines online, no other significant deposits have started up in recent years.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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