Gold's Double Blow: Rising Rate Odds and Malaysia's 10% Import Tax Drive Two-Month Low
Published on 05/28/2026 at 07:33 | Redaktion boerse-global.de
The precious metal has lost its usual safe-haven reflex. U.S. military strikes against Iranian facilities should have propelled gold higher, but the opposite happened: the spot price tumbled to a fresh two-month low of $4,397.86 on Thursday, dropping roughly 1.9% from the previous close of $4,481.30. The slide underscores how dominant the Federal Reserve’s tightening expectations have become over geopolitical risk.
The paradox stems from a familiar chain: conflict drives oil prices — West Texas Intermediate climbed around 2% — which feeds inflation fears, which in turn strengthens the dollar and pushes rate-hike bets higher. The dollar index firmed near 99.50, making gold costlier for non-U.S. buyers and amplifying selling pressure. Fed Governor Lisa Cook reiterated that rates would stay steady for now but refused to rule out further increases if inflation persists, while Vice Chair Philip Jefferson flagged energy shocks as a concrete growth risk. The CME FedWatch Tool now assigns a 47% probability to another rate rise by year-end, while the chance of a cut has dwindled to just 0.6%.
Compounding the macro headwinds, Malaysia blindsided the market by announcing a 10% import duty on LBMA gold bars, effective June 8, 2026. The move mirrors India’s earlier hike in gold import taxes and threatens to crimp physical demand from one of Asia’s key bullion hubs. UBS responded by slashing its year-end 2026 gold price target from $5,900 to $5,500 per ounce, citing higher real yields and a robust dollar. The bank still maintains a long-term bullish view, pointing to central bank purchases and institutional diversification as structural supports.
Should investors sell immediately? Or is it worth buying Gold?
The weakness is spreading across the precious metals complex. Silver dropped over 3% to $74.46, breaking key technical support levels, while platinum also lost ground. Palladium slipped 0.7%. The broader S&P GSCI Precious Metals Index stood at around 5,962 points, leaving it down more than 3.2% on the year.
Since hitting a 52-week high of $5,450 in January 2026, gold has retreated nearly 18%. On a monthly basis, losses have piled up to roughly 2.8%. For the past ten days, the metal has oscillated in a tight $4,400–$4,600 range, with traders waiting for a catalyst to break the deadlock.
All eyes now turn to the release of U.S. PCE data, the Federal Reserve’s preferred inflation gauge. A higher-than-expected print would likely reinforce the dollar’s strength and further dampen any hopes of a near-term rate pivot, pushing gold back toward the lower end of its range. Conversely, signs of easing price pressure could quickly reverse the narrative and restore the metal’s battered safe-haven appeal.
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