Global precious metals markets endured one of their most punishing weeks of 2026, as a confluence of surging US inflation data, aggressive Fed repricing, dollar strength, and a deepening geopolitical impasse in the Middle East combined to drive gold and silver sharply lower. The selloff was broad, rapid, and technically significant — erasing weeks of accumulated gains and forcing a reassessment of the near-term outlook for both metals. 

Gold has retreated to approximately $4530/oz — a weekly decline of around 4% and the metal’s weakest closing level since March 2026. Silver’s losses are more severe and more telling. Spot prices collapsed to $75/oz on May 15, shedding a decline of more than 10%. The gold/silver ratio widened sharply from 53.6:1 to 59:1 in one day, a move that underscored silver’s vulnerability in risk-off environments.

Last Inflation Double-Strike

The week’s defining catalyst was a simultaneous upside surprise across the US inflation complex. April CPI printed at 3.8% year-over-year, its highest reading since 2023, beating consensus on both the monthly and annual measures. PPI posted its steepest single-month increase since early 2022, while import and export prices rose at their fastest pace in three years. The structural driver behind this inflationary surge remains the Iran conflict and the sustained closure of the Strait of Hormuz, which continues to keep global energy costs elevated. In a single week, this dual inflation print achieved what months of cautious Fed communication had attempted — it comprehensively killed market expectations for rate cuts in 2026.

Fed Repricing and the Warsh Effect

Markets have now fully priced out any Fed rate cut this year. Traders are pricing at least one rate hike by March 2027, with odds above 50% for a move before year-end 2026. The Senate’s confirmation of Kevin Warsh as Fed Chair added a further hawkish dimension. Warsh’s policy posture is widely expected to sustain — and potentially deepen — the current restrictive rate environment. For gold, this is a direct structural headwind: rising real yields compress the opportunity cost advantage of holding a non-yielding asset, and the market wasted no time reflecting that reality in prices.

Geopolitical Deadlock and Structural Demand

On the geopolitical front, peace remains elusive. President Trump described Iran’s latest proposal as unacceptable, while Iranian media reported no substantive US concessions. The Strait of Hormuz remains closed, and escalation risks are rising. This stalemate simultaneously fuels energy inflation and reinforces the dollar’s reserve currency status — an unusual combination that neutralises gold’s traditional crisis premium.

Yet not all signals are bearish. India’s gold ETF inflows surged 186% year-on-year in Q1 2026 to a record 20 metric tons, with total demand nearly doubling to $25 billion — though an import duty hike may dampen near-term jewelry purchasing. More significantly, the People’s Bank of China made substantial gold purchases in April, and Chinese ETF inflows remained firm. These structural buying patterns represent a floor beneath the long-term bull case, even as short-term macro forces clearly dominate price action.

Indian Policy sequence- Three moves in five days

India government executed the most sweeping restructuring of its silver import framework in recent history — deploying three policy instruments within five days that collectively amount to a structural reset of the country’s bullion supply chain. A 15% import duty, a “Restricted” import classification, and a revised MCX Good Delivery framework for domestic refiners have together created a new market architecture. This report analyses the policy rationale, market implications, supply chain disruptions, and the medium-term outlook for silver prices, premiums, and sourcing channels in India.

Last week’s price action delivered a clear message: in an environment of persistent inflation, a hawkish Fed, and a strengthening dollar, gold’s safe-haven appeal is not unconditional. The metal can — and did — sell off sharply when macro headwinds align. How quickly those conditions shift will determine whether this correction deepens or sets the stage for renewed accumulation.

MCX Gold Spot

Gold has found near-term support around the $4500/oz level. A sustained break below this threshold would expose the next significant support at $4300/oz, representing meaningful further downside from current levels. Conversely, if prices stabilise and recover from this zone, the immediate upside target lies in the $4700–$4750/oz range.

Silver, having already absorbed a sharp weekly decline, faces a critical juncture near $75/oz. A breach of this level would open the door to the next downside supports at $70/oz and $67/oz respectively. On the upside, a technical rebound from current levels could carry prices back toward the $80–$82/oz zone.