U.S. May CPI Hits Three-Year High, Gold Sell-Off Deepens After Key Support Breaks

The U.S. consumer price index (CPI), compiled by the Bureau of Labor Statistics, is a key gauge used by the Federal Reserve to assess inflation and set interest-rate policy. The annual rate rose to 4.2% in May, its highest in three years, prompting markets to increase expectations that tighter policy would persist. Because gold pays no interest, a stronger dollar and higher rates raise the cost of holding it and tend to weigh on prices.

The latest reports said gold broke through a series of key technical support levels after the May CPI data were released, triggering algorithmic and technical selling by institutional investors and intensifying the sell-off. Trump later responded by saying, “I love inflation,” and claimed prices would “drop like a rock” once the war ended. The reports did not provide the gold price, trading value or exact support levels.