Shares of SPDR Gold MiniShares dropped $2.74 to $81.52 on Wednesday after the May CPI report landed on a market already rattled by last week's blowout jobs data. The Bureau of Labor Statistics reported that consumer prices rose 0.5% month-over-month and 4.2% year-over-year — accelerating from April's 3.8% annual rate.

Spot gold traded as low as $4,174 on June 10, extending a one-month decline of more than 11%. For GLDM holders, the fund — which tracks physical gold bullion — has now shed roughly 8% in a week.

  • Higher Inflation Means a Costlier Choice to Hold Gold. Gold pays no interest or dividends, so when bond yields rise, investors give up more income by owning the metal instead of Treasuries. The 10-year Treasury yield climbed to around 4.54% on Wednesday , and oil above $90 and yields near 4.5% are keeping the selloff tied to inflation risk.

Energy prices drove the May report, with the energy index rising 3.9% and accounting for over 60% of the monthly increase — meaning the very commodity shock that should attract safe-haven demand is instead fueling rate-hike expectations that crush gold.

  • A Fed Hike Is No Longer a Fringe Scenario. Chances of a Fed rate increase this year shot from 25% to 52% in the past week on prediction platform Kalshi.

Markets are now pricing roughly a 70% chance of a quarter-point hike by December.

Goldman Sachs has pushed its first expected rate cut all the way out to 2027. Every notch higher in rate expectations strengthens the dollar and raises the "opportunity cost" of sitting in a non-yielding asset like GLDM.

  • ETF Outflows Are Accelerating the Slide. Global gold ETF assets under management fell 2% in May to $604 billion, with collective holdings slipping to 4,121 tonnes — just below the record high reached in February.

North America turned negative, recording $1.1 billion in outflows as investors moved to the sidelines awaiting a clearer catalyst. When redemptions force ETFs to sell physical gold, it adds further downward pressure on spot prices.

  • The Long-Term Case Isn't Dead — But Patience Is Being Tested. Central banks bought 244 tonnes of gold on a net basis in Q1 2026, up 3% year-over-year , and UBS still sees gold reaching $5,500 and Morgan Stanley forecasts $5,200 in the second half. But with the June 16–17 FOMC meeting days away, near-term risk clearly skews lower. Citi has cut its 3-month gold target to $4,000 , a level that would translate to further losses for GLDM shareholders.