Shares of iShares Gold Trust plunged 3.6% to $72.81 on November 1, as a cocktail of strong U.S. economic data, sticky inflation, and rising oil prices fueled bets that the Federal Reserve will raise interest rates again — possibly as soon as December. The sell-off erased nearly two weeks of gains in a single session, marking the sharpest one-day decline for the gold-tracking ETF since mid-summer. Gold Sinks to One-Year Low as Hot Economy and Oil Shock Tighten the Fed's Grip — Can IAU Recover Before December?
Shares of iShares Gold Trust tumbled 3.6% to $72.81, mirroring a brutal session for bullion that pushed gold below $3,900 an ounce — its lowest level since October 2025 . The catalyst: a wall of data confirming the U.S. economy is running too hot for the Fed to relent, making gold's zero yield an increasingly expensive luxury.
A Blockbuster GDP Report Gave the Fed No Reason to Pause. Real GDP grew at an annual rate of 3.4% in Q3 2026, according to the advance estimate released October 29 by the Bureau of Economic Analysis — stronger than the roughly 3.2% economists had penciled in . Meanwhile, headline PCE inflation rose 0.5% in September, with the annual rate accelerating to 3.6%, while core PCE ticked up to 3.1% . For gold holders, hotter growth plus stickier inflation equals a Fed that keeps tightening — and every rate hike raises the "opportunity cost" of owning an asset that pays nothing while Treasury bonds pay more.
Wall Street Is Nearly Unanimous: Another Hike Is Coming. All 100 economists in an October survey expect the Fed to raise interest rates in December , and market-implied odds jumped to about 85% after the Fed held at 3.75%–4.00% last week . Bank of America now expects two more hikes — December 2026 and March 2027 , with a terminal rate of 4.25%–4.50%. That trajectory could keep gold under sustained pressure well into next year.
Oil at Six-Month Highs Is Fueling the Inflation That Hurts Gold. Brent crude rose 13.6% in October to a six-month high of $117.64 a barrel , driven by fears of escalation in the Iran war and an attack on a tanker in the Strait of Hormuz . Elevated energy costs feed directly into the inflation readings that keep the Fed hawkish — a vicious cycle for bullion.
The Bigger Picture: Gold Is on Track for Its Worst Year in Over a Decade. Gold hit a record near $5,600 in January but has since dropped to around $4,000; the Iran war pushed oil and Treasury yields higher, and gold is now on course for its steepest annual decline in 11 years . For IAU shareholders, the math is unforgiving: as long as real yields keep climbing, capital will continue flowing out of non-yielding metals and into bonds. The December 9 Fed meeting is the next inflection point — and the data so far suggests relief is nowhere in sight.