Shares of iShares Gold Trust Micro slid to $39.69 in pre-market trading on June 24, marking a $3.49 drop (roughly 8.1%) from its mid-June high of $43.18 — the steepest multi-session pullback the micro-sized gold ETF has suffered in months. The catalyst: rising bond yields and mounting anxiety over this Friday's PCE inflation print, the Federal Reserve's preferred price gauge. IAUM Drops 8% From Mid-June Peak as Rate-Hike Bets Surge — Can Gold's Structural Bull Case Survive a Hawkish Fed?
Shares slid as gold fell below $4,100 an ounce on Wednesday, sliding toward seven-month lows as expectations of tighter Federal Reserve policy outweighed support from the interim US-Iran peace agreement. IAUM, iShares' low-cost micro gold ETF, hit $39.69 in pre-market — down 3.2% from Tuesday and 8.1% from its June 16 close of $43.18 — leaving shareholders facing the most sustained drawdown since early spring.
• Bond Yields Are Making Gold Expensive to Own. The yield on the US 10-year Treasury note hovered around 4.5% on Tuesday after climbing in the previous session. Because gold pays no interest, elevated yields raise the cost of holding gold, which pays nothing.
A hawkish tone from the Fed last week has prompted investors to increase bets on further rate hikes, with markets now pricing the probability of a September rate increase at around 68%, up from 29% last week. That repricing alone explains much of IAUM's slide.
• Tomorrow's Inflation Report Could Set the Next Move. The PCE inflation report — the Fed's preferred price gauge — is scheduled for release on June 25. The last reading showed core PCE running at 3.3% year-over-year in April, up from 3.2% in March — well above the Fed's 2% target. A hot number would reinforce rate-hike expectations and likely push IAUM lower; a soft print could snap the selloff.
• The Iran Deal Is Removing Gold's Geopolitical Floor. Progress in negotiations between Washington and Tehran encouraged a rise in traffic through the Strait of Hormuz, easing pressure on global energy supplies and reducing inflation risks. That removes a key reason investors had been hiding in gold. Washington granted Iran a 60-day license to sell oil on international markets, boosting expectations of a faster recovery in global supply. Less geopolitical fear means less safe-haven demand.
• Wall Street Still Sees a Rebound — Eventually. Despite near-term pain, Goldman Sachs lowered its year-end gold target from $5,400 to $4,900 per ounce, citing the expectation that the Fed will not cut rates in 2026, though it remains positive longer term.
J.P. Morgan expects gold could reach $5,000 in the final quarter of 2026. If those forecasts hold, gold at ~$4,100 is roughly 20% below year-end targets — but only if rate-hike fears peak soon. For IAUM holders, the message is clear: the long-term case depends entirely on whether today's inflation data marks the ceiling for Fed hawkishness, or just the beginning.