- Starting from May 13, the Indian government significantly increased the import duty on gold and silver from 6% to 15% and systematically tightened the qualifications for importing silver raw materials. This directly led to a structural profit-taking and a sharp decline in import volumes in India's physical gold and silver market.
- The continuous rise in the U.S. Consumer Price Index and Producer Price Index prompted the swap market to completely abandon the widespread consensus on rate cuts in early 2026, instead factoring in a marginal probability of one rate hike within the year. Consequently, the spot gold price fell below the short-term key support level of $4,500 per ounce.
- Goldman Sachs, based on the revision of the official trade statistics gap, systematically raised its immediate forecast for the global central bank's monthly gold purchases in 2026 to 60 tons. The rigid allocation of diversified sovereign reserves remains a key force supporting the long-term bottom of precious metals.
Macroeconomic Reflation Forces Fed Policy Expectations to Shift
With the U.S. core Consumer Price Index and Personal Consumption Expenditure Price Index consistently exceeding the Federal Reserve's long-term target level of 2% in recent months, the international capital market's pricing model for the U.S. risk-free interest rate curve has fundamentally shaken. The risk of reflation is becoming increasingly sticky due to the energy supply-side premium caused by conflicts in the Middle East. The pricing benchmark of the interest rate futures market has shifted from the optimistic 1 to 2 rate cuts at the beginning of the year to currently factoring in the tail risk of one rate hike. At the sensitive juncture of Kevin Warsh's confirmation to officially take over as Fed Chair before the June 17 monetary policy meeting, the new management's policy easing space has been substantially compressed in the short term due to the solidification of the inflation path.
Indian Tariff Barriers Trigger Regional Physical Demand Reassessment
As a core consumer of physical gold and silver globally, the new tariff regime introduced by the Indian Ministry of Finance has had a dramatic impact on short-term spot premiums. After the import duty was systematically raised from 6% to 15% on May 13, Indian domestic gold and silver investors and commercial banks quickly initiated profit-taking procedures, resulting in a significant discount of about $200 per ounce in Indian domestic gold prices compared to the international official spot price on May 14. Statistics show that India's gold imports in April have fallen to 660,000 ounces, a significant reduction of 47% compared to the monthly average of 1.25 million ounces over the past five years. If the high tariff policy continues into the third quarter, India's overall import scale in the second quarter of 2026 is likely to remain under pressure.
Central Bank Reserve Diversification Builds Parallel Bullish Foundation
Although the Indian factor has formed a local bearish impact on the short-term spot market, the normalized strategic gold purchases by global sovereign central banks are offsetting this physical demand gap. After updating its official trade balance forecast model, Goldman Sachs further raised its estimate of the global central bank's average monthly gold purchases in 2026 from 50 tons in March to 60 tons, a figure that was only 29 tons at the beginning of the year. Against the macro backdrop of geopolitical fragmentation and the transformation of the global multilateral clearing system, non-U.S. sovereign countries have raised higher requirements for the safety, liquidity, and independence of foreign exchange reserve assets. This asset allocation diversification buying from the central bank level constitutes a medium to long-term structural support for gold to cross the macro tightening cycle.
