Gold has fallen 1.21% on the session to $4,172.90/oz on COMEX, extending a months-long correction from the January 2026 all-time high above $5,600/oz. The selloff accelerated after Fed Chair Warsh signaled that inflation remains too sticky to justify rapid rate cuts, with US CPI running at 4.2% year-over-year in May.
The precious metal now sits roughly 25% below its January peak, erasing much of the safe-haven premium built during the Middle East escalation and US-China trade tensions of late 2025. COMEX managed money long positions have declined for six consecutive weeks, according to CFTC data.
Treasury real yields have risen 45 basis points since the January high, removing a key support for non-yielding gold. The Bloomberg Dollar Index stabilized in the 126-127 range, further reducing gold's appeal to non-USD buyers.
Central bank buying, which reached 1,045t in 2025 per the World Gold Council, remains a structural floor. However, the pace of purchases slowed in Q1 2026 to approximately 230t, down from 290t in Q4 2025. China's PBoC and Poland's NBP were the largest buyers.
ETF outflows tell a similar story. Global gold ETFs lost 85t in May 2026, with North American funds accounting for 72% of outflows. European funds saw marginal inflows driven by persistent geopolitical uncertainty.
The options market suggests continued near-term weakness. The 25-delta risk reversal on COMEX has shifted bearish for the first time since October 2025. Put activity is concentrated at the $4,000 and $3,800 strikes for July expiration.
Procurement teams should delay large gold purchases near support at $4,000/oz. The lower end of the correction range offers better entry points. Monitor monthly WGC central bank data and COMEX managed money positioning for reversal signals.