Shares of Goldman Sachs Physical Gold ETF dropped 3.4% to $39.15 in pre-market trading on June 24, extending a punishing streak that has erased 8.4% of the fund's value in just six trading days. For holders of this physical-gold-backed fund, the question is whether gold's role as a crisis hedge still works when the crisis is inside the stock market, not outside it.
• Rising Bond Yields Are Making Gold More Expensive to Own. The 10-year Treasury yield rose to 4.5%, its highest level in about two weeks, while the 2-year yield climbed above 4.2%, reaching its highest since February 2025. Gold pays no interest, so when bonds offer fatter returns, investors shift money out of bullion. A hawkish tone from the Fed last week prompted investors to increase bets on further rate hikes, with markets pricing the probability of a September increase at around 68%, up from 29% the prior week.
Both Deutsche Bank and BofA have revised their forecasts to include a September hike. Every basis point higher in yields is a headwind for AAAU's price.
• The Tech Crash Is Hurting Gold, Not Helping It. Normally, a stock-market meltdown sends money into gold. This time the opposite happened. Gold faced additional selling pressure as a sharp decline in U.S. technology stocks prompted investors to trim bullion positions to offset losses elsewhere in their portfolios.
The Nasdaq dropped 2.2% and the S&P 500 fell 1.4% as investors dumped semiconductor and AI-related stocks, while South Korea's Kospi collapsed 10%. Investors sold gold to raise cash and cover margin calls — a pattern last seen in the early days of the 2020 pandemic crash.
• ETF Outflows Are Accelerating. JPMorgan's analysis showed gold ETF outflows of around $20 billion in the week to June 5 alone.
North America recorded $1.1 billion in outflows in May, with flows muted since gold began trading sideways after the March drawdown, as higher rates and dollar strength raised the opportunity cost of holding bullion. AAAU's 52-week range of $32.15 to $54.71 shows how violent the swings have become.
• Thursday's PCE Report Is the Next Flashpoint. The upcoming PCE inflation report — the Fed's preferred gauge — will be closely watched this week. A hot reading would cement rate-hike expectations and push gold lower. A soft print could snap the selloff overnight. Gold has already fallen 10.83% over the past month yet remains 22.26% higher year-over-year — a reminder that the long-term thesis around inflation hedging is intact, even if the short-term trade is brutal.