Shares of GLD plunged -2.2% to $404.46 in pre-market Monday, extending a brutal selloff that has erased 12% over the past five trading days alone. Gold cracked several support levels to test below the $4,200 mark , as the very crisis that should be lifting prices — war in the Middle East — is instead crushing them. The reason is counterintuitive but critical: oil-driven inflation is killing the case for rate cuts, making gold more expensive to own.
• Oil Above $100 Rewrites the Rate Playbook. Escalating conflict in the Middle East pushed Brent crude above $100 per barrel.
The Strait of Hormuz, a critical maritime passage, has seen access restricted for most non-Iranian vessels since hostilities started.
Roughly three weeks into the Iran war, soaring crude and gas prices are raising inflationary risks, making rate cuts by the Federal Reserve and other central banks less likely. At the start of the year, futures markets were pricing in at least four interest rate reductions for 2026 — those bets have evaporated. For gold, which pays no interest, that's devastating: when Treasury bonds yield ~4.4%, investors get paid to not hold gold.
• $6 Billion Has Fled GLD in Three Weeks. GLD has lost over $6 billion in the last three weeks.
On March 4, GLD recorded a staggering net cash outflow of $2.91 billion in a single day, the largest withdrawal since 2016.
Gold dropped 11% last week, posting its biggest weekly loss since 1983. The fund's shrinking asset base directly cuts management fee revenue for State Street, its sponsor.
• Bitcoin Is Eating Gold's Lunch. While GLD was bleeding nearly $3 billion, spot Bitcoin ETFs reported net inflows of over $460 million on the same day.
This suggests a tactical rotation where younger, more aggressive institutional desks are viewing digital assets as the preferred volatility play , leaving gold ETFs as a piggy bank to cover losses elsewhere.
• Bulls Aren't Dead Yet — But the Bar Is Higher. J.P. Morgan predicts gold prices will reach $6,300 per ounce by the end of 2026, while Deutsche Bank is standing by a $6,000 year-end target. But analyst Choi Jin-young warned that "a return to previous highs will be difficult considering the interest rate environment and margin requirements." The bull case hinges on the conflict ending, dollar strength fading, and rate cuts resuming — none of which appear imminent.
Bottom line: Gold is caught in a paradox — a war that raises inflation but kills rate-cut hopes. Until oil stabilizes or the Fed blinks, GLD shareholders are paying a steep price for an asset that was supposed to protect them.