Shares of SPDR Gold Shares (GLD) plunged 4.9% to $423.02 on March 19 as spot gold cratered below $4,700/oz — its lowest since early February — after the Federal Reserve made clear it's in no hurry to cut rates while inflation runs hot and a Middle East war drives oil above $115 a barrel. The selloff raises a pointed question: is this a shakeout in a historic bull market, or the beginning of a deeper correction?

  • The Fed Slammed the Door on Near-Term Rate Cuts

The FOMC voted 11-1 to hold rates at 3.5%–3.75% , and the "dot plot" pointed to just one reduction this year and another in 2027.

Chair Powell "pushed back on the idea of near-term rate cuts and sounded a bit more hawkish regarding the outlook for inflation." For gold — which pays no interest — higher-for-longer rates raise the opportunity cost of holding bullion versus Treasurys. Odds for a June cut slumped to just 18.4%, with September at only 43.6%.

  • Wholesale Inflation Came In Scorching — Before the Oil Shock Even Hit

The producer price index surged 0.7% in February, more than double the 0.3% economists expected.

Year-over-year headline PPI jumped to 3.4%, the highest in a year. Critically, none of the inflation data so far has captured the price increases associated with the war — meaning the worst readings likely lie ahead. Fed officials now expect 2.7% PCE inflation for 2026 , well above the 2% target.

  • A War-Driven Oil Shock Is Fueling, Not Fighting, Gold's Enemy

The conflict has choked off oil supply through the Persian Gulf; Brent crude touched $119.50 per barrel, up from about $70 before the U.S.-Israeli attacks. Surging energy costs normally boost inflation hedges like gold, but this time the dollar strengthened and Treasury yields climbed — the 10-year rose to 4.265% and the 2-year jumped to 3.775% — drowning out gold's safe-haven bid.

  • The Bull Case Isn't Dead — But It Needs Patience

The structural reasons gold ran from $2,600 to over $5,000 in twelve months haven't changed.

Central banks bought 230 tonnes in Q4 2025 alone , and J.P. Morgan's 2026 gold target remains $6,300. But as long as the Fed holds firm, GLD holders face a bumpy ride: "If we don't see that progress [on inflation], then you won't see the rate cut," Powell warned.