Gold Slumps 17% from January Peak as Warsh’s Hawkish Fed and India’s 15% Tariff Squeeze Bullion
23.05.2026 - 06:11:36 | boerse-global.de
Gold closed the week at $4,522.60 per troy ounce, down 0.73% on the week and roughly 17% below the January high of $5,450. The precious metal is being squeezed from multiple sides: a newly installed Federal Reserve chair who sounds more hawkish than his predecessor, tentative signs of thaw in US-Iran nuclear talks, and a steep hike in India’s gold import duty.
Kevin Warsh took the helm of the Fed on May 22, replacing Jerome Powell. In his first public comments, Warsh signalled a tighter bond portfolio and closer coordination with the White House — a stance the market interpreted as a green light for further tightening. Fed Governor Christopher Waller reinforced that message, pushing back against any premature easing while US inflation sits at 3.8% and long-term inflation expectations have crept up to 3.9%. Traders now see a 58% probability of a 25-basis-point rate increase before December 2026, with bets on a December move specifically topping 60%. Higher rates raise the opportunity cost of holding non-yielding bullion and strengthen the dollar, a double blow for gold.
Across the Atlantic, the India story is adding its own weight. New Delhi raised the import tariff on gold from 6% to 15%, a move the World Gold Council expects to shave 50 to 60 tonnes off annual demand — roughly 10% of the Indian market’s volume. Bar and coin purchases are seen as particularly vulnerable. The price of gold in Mumbai dropped 600 rupees to 1.64 lakh per 10 grams, a direct reaction to the policy shock.
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Yet the structural demand backdrop remains surprisingly solid. Goldman Sachs has revised its estimate of monthly central-bank gold buying to around 60 tonnes, after noticing that British trade data had understated outflows from London vaults since August 2025. The World Gold Council reported net purchases of 244 tonnes in the first quarter of 2026, comfortably above the five-year average. That institutional buying is providing a floor, even as speculative and retail interest wanes.
Geopolitical noise has been more of a mixed bag. Reports of progress in US-Iran talks on Friday briefly lifted the risk appetite and pared some of gold’s safe-haven premium. But no deal has been struck — the core dispute over Iran’s uranium enrichment programme remains unresolved, with Tehran insisting its stockpiles stay in the country against Washington’s and Israel’s demands. Tensions in the Strait of Hormuz continue to simmer, keeping oil markets on edge and providing a latent source of support for gold should diplomacy stall.
On the supply side, mine developments are proceeding. 1911 Gold Corp is advancing the True North Mine in Manitoba, with test mining slated for 2026. NevGold is accelerating its Limo Butte project in Nevada, which also contains antimony resources — a metal increasingly in demand for defence and battery applications.
Technically, gold is trading about 3% below its 50-day moving average of $4,670, and the $4,500 level is being watched as a critical psychological support. The coming week will bring fresh US economic data and more speeches from Fed officials. Should Warsh flesh out details of his balance-sheet reduction plan, the pressure on bullion could intensify. If Iran talks lose momentum again, the risk premium may quickly return — and with it, a reason for buyers to step back in.
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