Gold Suffers Worst Week Since 1983 — And It's Not Just About Fed Rate Hikes
Gold is being hit from two directions simultaneously — and the combination is producing a sell-off not seen in over four decades. • SPDR Gold Shares stock is showing weakness. Why is GLD stock trading lower? The precious metal is down nearly 9% week-to-date through Friday morning — its worst weekly performance in over four decades. While rising expectations for Fed rate hikes have been the primary driver, another pressure point is emerging: growing speculation that some Gulf states may be forced to sell gold reserves to plug fiscal gaps as crude export revenues evaporate. The chart tells two stories simultaneously. The percentage decline of 9.11% is the worst weekly move since 1983. But the dollar loss is even more striking — gold has shed $441 per ounce this week, the largest weekly dollar decline in the metal’s recorded history, a direct consequence of prices that were near all-time highs when the selling began. The Rate Hike That Broke Gold’s Most Powerful Tailwind Gold’s most powerful tailwind entering 2026 was the expectation of falling real interest rates. Two to three Federal Reserve rate cuts were priced for the year. Lower real rates reduce the opportunity cost of holding gold — a non-yielding asset — and that dynamic had driven bullion to record highs in 2025. The Iran war destroyed that thesis in three weeks. The CME FedWatch tool now shows a 52% probability of a Fed rate hike by October. Polymarket prices the odds of a 2026 hike at 24%, up from just 6% before the conflict began. When rate hike expectations surge, real yields climb, the ... Full story available on Benzinga.com
