Shares of abrdn Physical Gold Shares ETF slid to $41.31 on June 5, dropping 3.2% in a single session after a stronger-than-expected U.S. jobs report forced traders to recalculate the odds that the Federal Reserve will raise — or at least hold — interest rates longer than anticipated. For holders of a fund that simply tracks the price of physical gold stored in vaults, the math is brutally simple: when rates stay high, assets that pay no interest lose their appeal. SGOL Tumbles 3.2% After Blowout Jobs Report Kills Rate-Cut Hopes — Can Gold Bulls Still Make Their Case?
Shares of SGOL dropped sharply to $41.31 on Friday as a blowout May jobs report torched any lingering hope that the Federal Reserve would cut interest rates this year, sending gold prices tumbling and dragging gold-backed ETFs lower. For shareholders in a fund that holds nothing but physical gold bars, this is the core vulnerability on full display: when safer investments like Treasury bonds pay attractive yields, gold — which earns nothing — becomes harder to own.
• The Jobs Number Wasn't Just Good — It Was Nearly Double Expectations. The U.S. economy added 172,000 jobs in May, blowing past expectations.
Economists surveyed by Bloomberg had anticipated payroll growth of just 88,000.
The unemployment rate remained flat at 4.3%. That almost two-to-one beat crushed the narrative that the labor market was weakening enough to justify lower rates, directly undercutting gold's most important bullish catalyst.
• Fed Officials Are Now Openly Talking About Raising Rates. Cleveland Fed President Beth Hammack said it may soon be appropriate to raise interest rates, noting the jobs report "reaffirms that the labor market appears to be roughly in balance" and that unemployment "is right around my definition of full employment."
Kansas City Fed President Jeffrey Schmid put it bluntly, noting inflation has "probably crept up into the 3.50% range" and asking whether it's "time to raise rates a quarter or two." Every basis point of potential tightening raises the opportunity cost of holding gold and puts direct pressure on SGOL's price.
• Gold Has Already Shed Hundreds of Dollars From Its Peak. Gold futures, currently near $4,450, have retreated from earlier highs above $5,000, facing pressure from sticky inflation and the Fed's decision to hold rates at 3.50–3.75%. Markets have largely priced out further 2026 rate cuts, elevating real yields and the cost of holding non-yielding gold. SGOL itself is now down roughly 4.6% from last week's $43.28 close, reflecting a five-day slide that matches the metal's trajectory.
• The Longer-Term Picture Still Has Supporters, But It Won't Help Today. J.P. Morgan expects an average 2026 gold price around $5,243 per ounce and still believes gold could move toward $6,000 if demand strengthens later this year.
Persistent central bank purchases and de-dollarization flows provide structural support. But those are multi-month stories. Right now, with new Fed Chair Kevin Warsh's first meeting just 11 days away and inflation running above 3%, the near-term math works against every ounce in SGOL's vaults.