Gold prices hit a two-month low this week as stronger-than-expected US jobs data fueled expectations of more interest rate hikes. The metal, which pays no income, dropped as traders recalibrated their outlook for Federal Reserve policy. The same logic applies to cryptocurrency, which also lacks a yield — meaning the selling pressure could spread. Crypto Briefing first reported the analysis on Tuesday.
The jobs report that changed the outlook
The US economy added far more jobs than anticipated in May, according to the Bureau of Labor Statistics. The numbers were released Friday and immediately shifted market expectations. Where traders had been betting on a pause, they now see a strong chance of another rate increase in June. Gold reacted swiftly, falling from near $1,980 to as low as $1,935 before settling around $1,950. It hasn't been this low since early April.
The move was a reminder that gold remains sensitive to real interest rates. When rate-hike bets rise, the dollar strengthens and yields climb — both of which pressure gold.
Why crypto could be next
The same forces that pushed gold lower are now hanging over digital assets. Bitcoin and other cryptocurrencies do not generate interest or dividends. When yields on bonds and cash equivalents go up, the appeal of holding a non-yielding asset diminishes. Investors can park money in short-term Treasuries or money market funds and earn a decent return with far less volatility.
The Crypto Briefing piece argues that this macro shift could trigger a sell-off in crypto, especially if the Fed follows through. Historically, crypto markets have moved in tandem with risk assets during tightening cycles. There's no reason to think this time is different.
The timing is awkward for the crypto industry, which had been hoping for a sustained recovery after a rough 2025. Several major tokens have already stalled in recent weeks, failing to break through resistance levels. Adding rate-hike pressure on top of that does not bode well.
What to watch in the coming weeks
The immediate focus is the Federal Reserve's next policy decision. If the central bank raises rates again, the message will be clear: inflation is still too high, and easy money is a thing of the past. That would likely push gold lower and could drag Bitcoin down with it.
For now, traders are hedging. Some are moving into dollar cash positions. Others are watching the $1,900 level on gold as a potential floor. For crypto, the key support levels haven't been tested yet, but that could change fast if the macro headwinds persist.
The next jobs report and CPI data will tell us whether this is a blip or the start of a longer trend. Either way, the era of low rates is over — and both gold and crypto are having to adjust.
