Gold Slips to $4,678 as Hot CPI and Modi’s Buying Ban Compound Dollar Strength

Gold’s safe-haven luster faded on Tuesday as a hotter-than-expected US inflation report and a public plea from India’s prime minister to curb bullion buying overwhelmed support from simmering Middle East tensions. The LBMA fixing slid 1.22% to $4,678.10 an ounce, retreating from Monday’s near-three-week high of roughly $4,730.

The catalyst came out of Washington: US consumer prices rose 3.8% year-on-year in April, overshooting the 3.7% consensus forecast. Core inflation also surprised to the upside at 2.8%. For gold, which pays no yield, the data shifted the rate narrative decisively. Markets now price in a better-than-70% probability that the Federal Reserve will hike rates by April 2027, while the chance of a cut to the 3.25%–3.50% range in June stands at a meager 4.2%. Morgan Stanley strategist Matt Hornbach expects no easing at all in 2026.

Beyond the Fed calculus, an unusual headwind emerged from New Delhi. Indian Prime Minister Narendra Modi called on his citizens to stop buying gold, a move that carries weight in the world’s second-largest bullion consumer. India imported nearly $72 billion worth of the metal in the last fiscal year, and a voluntary halt to domestic demand could weigh on physical flows. The call came even as geopolitical risks persist: US President Donald Trump described the US-Iran ceasefire as on “massive life support” after rejecting a fresh peace proposal from Tehran. The Strait of Hormuz remains a flashpoint, with a prolonged blockade threatening supply chains and pushing oil prices higher—a double-edged sword for gold that lifts safe-haven bids but fans inflation anxieties.

The dollar’s strength added another layer of pressure. A firmer greenback makes dollar-denominated bullion more expensive for overseas buyers, curbing demand at a time when rising real yields are already eroding gold’s appeal.

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Technical markers tightened. After touching an intraday high of $4,748, the spot price slid to around $4,717, with the COMEX August future settling near $4,722 in a mild contango. Support sits at $4,666—the primary line in the sand—below which the uptrend from the May low of $4,501 would be threatened. A secondary floor at $4,696, defended by buyers earlier in the session, has already been tested; the day’s low was $4,648. On the upside, heavy resistance clusters between $4,750 (secondary’s ceiling) and the $4,764–$4,828 zone cited by primary analysis. A clean break above $4,828 would reopen the path toward $4,916.

Chart watchers also noted a bearish crossover: the 50-day moving average slipped under the 100-day moving average, a signal often read as deteriorating medium-term momentum.

Riding the high price environment, Barrick Gold delivered a standout quarter. The miner reported first-quarter revenue of $5.22 billion and net profit of $1.65 billion—double the year-ago figure—while averaging a realized gold price of $4,823 an ounce. Barrick shares climbed nearly 9% on the news. In Europe, physically backed gold ETFs saw renewed inflows as investors hedged against the uncertain macro backdrop.

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All eyes now turn to Wednesday’s US producer price index. A strong PPI reading would amplify the CPI shock and tighten the Fed’s hand, likely keeping gold pinned between $4,666 and the $4,764–$4,828 resistance band in the near term.

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