Shares of iShares Gold Trust slid $2.72 to $81.56 on June 5, 2026, marking the sharpest single-day decline in weeks, after a red-hot U.S. employment report rewired expectations for Federal Reserve policy and sent investors fleeing from non-yielding assets like gold. Gold's Worst Day in Weeks as Blockbuster Jobs Data Fuels Rate-Hike Fears: Is IAU's Rally Over or Just Pausing?

Shares of iShares Gold Trust dropped 3.2% to $81.56 on Friday after the May jobs report obliterated expectations, forcing a rapid repricing of Federal Reserve policy and hammering gold prices. The U.S. economy added 172,000 jobs in May — more than double the 85,000 Bloomberg economists had forecast — while unemployment held steady at 4.3%. The blowout number sent the 10-year Treasury yield spiking and the dollar surging, creating a one-two punch against gold, which pays no income and becomes less attractive when safer assets offer higher returns.

The Jobs Number Was Twice What Wall Street Expected — and That Changes Everything

The economy added 172,000 jobs, blowing past the anticipated 88,000, while unemployment stayed flat at 4.3%. Making it worse for gold bulls, prior months were revised sharply higher: March and April payrolls combined were 93,000 more than previously reported. A labor market this strong gives the Fed zero reason to cut rates — and growing reason to consider raising them.

Rate-Hike Odds Are Climbing Fast, Squeezing Gold From All Sides

Markets now assign an 85% probability to a quarter-point Fed rate hike by year-end, up from 60% just a week ago.

Prediction market Polymarket puts the chance of a 2026 rate hike at 51%. The Fed currently holds rates at 3.50%–3.75%, and new Chair Kevin Warsh, who took over May 15, faces his first FOMC meeting June 16–17. Higher rates push up the "real yield" on bonds — what investors earn after inflation — making zero-yielding gold comparatively costly to hold. The 10-year Treasury yield spiked toward 4.55% on the jobs data , while the dollar index hit 99.54, its highest since April.

Gold Has Already Dropped 16% From Its Highs — and Headwinds Are Stacking Up

Gold fell to roughly $4,408 per ounce by mid-morning, down $95 from Thursday.

Since the Middle East conflict began in late February, gold has lost about 16% as surging oil prices stoked inflation fears and raised the likelihood of higher rates. IAU has now fallen 4.6% from its May 29 close of $85.49 — a sharp reversal for a fund still up roughly 35% year-over-year.

The Longer-Term Picture Isn't All Bleak — But the Near-Term Math Hurts

J.P. Morgan recently trimmed its short-term forecast after weaker ETF inflows but still projects an average 2026 gold price near $5,243.

However, markets have largely priced out further 2026 rate cuts, elevating real yields and the opportunity cost of holding gold. For IAU holders, the calculus is clear: until inflation cools enough to let the Fed ease, every strong data print is a headwind.