Shares of abrdn Physical Gold Shares ETF plunged 3.4% to $36.95 on November 1, marking the fund's steepest single-session drop since mid-2026 and extending a week of steady losses from $38.07 on October 23. The catalyst: a cocktail of hot economic data that made a December Federal Reserve interest-rate hike look increasingly likely, punishing an asset that pays no dividends or interest. SGOL Drops 3.4% as Gold Hits 2026 Low — Is This a Buying Opportunity or the Start of a Deeper Rout?
Shares of SGOL tumbled 3.4% to $36.95 on Friday as spot gold crashed below $3,900 an ounce — its lowest level of 2026 and roughly 30% below its January peak. A torrent of economic data made the case that the Federal Reserve isn't done raising borrowing costs, and gold — which generates zero income — is the first casualty when interest rates climb.
The Economy Came in Too Hot for Gold's Comfort
The U.S. economy grew at a 3.4% pace in Q3, faster than the 3.1% forecast, while September inflation hit 3.6% on the Fed's preferred gauge, with core prices running at 3.1% — both well above the central bank's 2% target. For SGOL holders, this is the worst combination: strong growth removes any urgency for the Fed to ease, while sticky inflation keeps rate-hike pressure alive.
Markets Now See a 75–83% Chance the Fed Hikes Again in December
The Fed held rates at 3.75%–4.00% on Wednesday, but markets assign roughly a 75% probability of a December hike via the CME FedWatch Tool.
Futures markets in some readings put that figure as high as 83%. When rates rise, Treasury bonds and savings instruments — including new I bonds now yielding 5.51% — draw money directly away from gold, which pays nothing.
A Tech Selloff Made the Bleeding Worse
A technology-stock selloff forced leveraged investors to liquidate gold positions for cash , amplifying selling pressure beyond what the macro data alone would explain. Speculative selling and ETF outflows further accelerated the move. SGOL's five-day slide from $38.07 to $36.95 — a 2.9% weekly loss — mirrors gold's broader 3.7% weekly decline.
Analysts Are Split on Whether the Bottom Is In
Standard Chartered's Suki Cooper says gold must hold $3,886 support, while JPMorgan's Yuxuan Tang sees further downside until rates finally peak.
JPMorgan expects hikes in December and early 2027, potentially pushing 10-year Treasury yields to 5.25%–5.50% — a major headwind. Yet a Reuters poll of 30 analysts places the median 2026 gold forecast at $4,495 , implying significant upside if rate expectations eventually reverse. For SGOL shareholders, the calculus is binary: either the Fed peaks soon and gold recovers, or the tightening cycle grinds on and today's losses deepen.