Gold plunges as strong US jobs data rattle markets

Friday 13 February 2026 - 08:20

By: Dakir Madiha

Gold plunges as strong US jobs data rattle markets

Gold tumbled sharply and silver posted one of its steepest daily losses in months after stronger than expected US employment data dampened hopes for imminent interest rate cuts by the Federal Reserve, triggering heavy selling across precious metals markets.

Spot gold dropped more than 3 percent on Thursday, at one point sliding as much as 4 percent to $4,880 per ounce before trimming some of its losses. Silver fell around 10 percent during the session, marking one of its most significant single day declines in recent months.

The selloff followed the release of January employment figures showing the US economy added 130,000 jobs, far exceeding the Dow Jones consensus forecast of 55,000. The unemployment rate edged down to 4.3 percent. The stronger labor market data led investors to reassess expectations that the Federal Reserve would soon begin cutting interest rates, pushing bond yields higher and weighing on non yielding assets such as gold.

Market participants said the speed of the decline caught many traders off guard. Analysts pointed to algorithmic trading and stop loss orders as key factors amplifying the move.

Fawad Razaqzada, market analyst at City Index and FOREX.com, told Reuters that many investors had placed protective stop orders just below the psychologically important $5,000 level or above $5,100 to safeguard their positions amid recent volatility. Once prices broke below $5,000, a wave of stop loss triggers accelerated the downward momentum, creating a cascade effect that drove prices sharply lower in a short period.

The breach of the $5,000 threshold intensified selling pressure, with automated trading strategies contributing to the rapid slide. Traders described the session as a technical driven rout rather than a shift in long term fundamentals.

Nicky Shiels, head of metals strategy at MKS PAMP SA, characterized the move as a broad risk off event. In periods of acute market stress, she noted, investors often liquidate even traditional safe haven assets such as gold to raise cash and meet margin calls or cover losses in other markets.

During early Asian trading on Friday, gold prices stabilized and edged higher, trading between $4,940 and $4,960 per ounce as bargain hunters returned to the market. Attention has now shifted to upcoming US consumer price index data, due later Friday, which analysts say could shape the next phase for precious metals.

A stronger than expected inflation reading, similar to the robust employment report, could further delay expectations for Federal Reserve rate cuts and prolong the current adjustment period for gold, according to market commentary from Futunn.

Despite Thursday’s sharp decline, gold remains up roughly 17 percent since the start of the year. Several major banks continue to project that prices could climb toward $6,000 per ounce in 2026, supported by sustained central bank purchases and steady demand from retail investors seeking portfolio diversification.