I own gold. I still question it: price declines, portfolio weight and GLD
By @engtmk · Research as of 28 September 2026
Gold is roughly 26% below its January spot-price peak. I still own it, and ownership does not remove the need to question its role.
My 24 September snapshot showed GLD at 6.3% of my eToro account, with the position up 4.7% against my purchase costs. My target allocation is 6%. That reconciliation proposed no GLD trade.
Those are dated portfolio facts, not a live account reading. They also do not conflict with gold’s market drawdown: my gain and the decline from a market peak start from different prices, use different instruments and end on different dates.
My conclusion is about discipline: a sharp price fall can make only a modest difference to portfolio weight. Before saying my process calls for a purchase, I need an updated account calculation and a fresh assessment of the investment case. This article supplies neither a new trade instruction nor a claim that the bottom is in.
The market snapshot: what changed today
Reuters reported spot gold at $4,155.67 per ounce at 10:31 GMT on 28 September, down 3.1% and at its lowest since 5 August. It described a firm dollar and rising Treasury yields, with CME FedWatch indicating a 70.3% market-implied chance of an October Fed hike. Oil rebounded after President Trump rejected Iran’s proposal to resolve the conflict and reopen Hormuz. Reuters report.
For the drawdown comparison, Reuters previously identified a January record of $5,594.82 per ounce. Comparing the intraday price above with that record gives approximately −25.7%, rounded to 26%: 4,155.67 ÷ 5,594.82 − 1. This is a spot-price comparison, not a GLD total-return calculation. Reuters, 22 September.
Early-session reporting also placed the U.S. 10-year Treasury yield near 5.23%. This is a separate market observation, not a synchronised quote captured at gold’s timestamp. Al Khaleej market report, 28 September.
Intraday prices and implied probabilities can change quickly. The figures establish the setting for this analysis; they are not closing prices or a forecast of the Fed’s decision.
Why an inflation scare can pressure gold
Gold produces no interest income. When investors can obtain a higher return from interest-bearing assets, the opportunity cost of holding it can rise. A stronger dollar can also make dollar-priced bullion more expensive for buyers using other currencies.
But a nominal Treasury yield is not a real yield. The latter reflects an inflation-adjusted return; a rise in nominal yields alone does not tell us how much inflation expectations changed. I therefore would not use the 5.23% quote as proof of a particular move in real yields.
The relevant mechanism is conditional. If an oil shock increases inflation concerns and investors expect tighter monetary policy, the resulting rates and currency response can weigh on gold. At the same time, geopolitical uncertainty can encourage demand for it. These forces can pull in opposite directions.
That is why calling gold an inflation hedge is not enough to predict its daily direction. The source of inflation, the expected policy response, currency movements and investment demand all matter. Today’s weakness is evidence that owning gold does not guarantee protection during every geopolitical shock; it does not prove that gold can never diversify a portfolio.
What I am assessing when I hold GLD
The SPDR Gold Trust aims to reflect gold bullion’s price performance after expenses. Its published expense ratio is 0.40%, and its NAV uses the LBMA Gold Price PM benchmark. Official GLD information.
This exposure differs from owning a gold miner. It does not bring an operating company’s production growth, profit margin or dividend stream. Its appeal must be assessed through the role of gold exposure, the price paid and the costs of maintaining the position.
An intraday spot quote is also not the same thing as the return on a listed GLD position. Trading hours, the observation window, expenses and market-price differences can affect comparisons. Any broker-specific instrument terms would need to be checked separately. I am not assuming that Monday’s quoted spot decline is my actual account return.
For me, the useful review question is whether the allocation still improves the portfolio’s balance of risks over the intended holding period. That requires examining it alongside the other holdings. A diversification thesis should be judged across relevant conditions, including occasions when it fails to offset losses elsewhere.
Three percentages answering three different questions
| Figure | Starting point and meaning | What it cannot establish |
|---|---|---|
| About −26% | Spot gold versus its January peak, using the cited Monday quote | My personal return or gold’s fair value |
| +4.7% | My GLD position versus purchase costs in the 24 September snapshot | Its return since the January peak or its current profit |
| 6.3% | GLD’s share of account value in that snapshot | Whether an updated account needs a trade |
The first describes a market drawdown. The second describes my experience. The third describes exposure. None can substitute for the others.
Being above my cost does not make the holding safe. Being below a historic peak does not make it cheap. And a target weight cannot be evaluated against an old account value as though nothing else has moved.
The allocation arithmetic
To isolate the effect, start with a hypothetical portfolio worth 100 units, using the snapshot weight as the starting allocation. GLD is worth 6.3 units and everything else 93.7 units.
Assume the GLD holding falls 3.1%, with the rest unchanged and no trades, deposits or withdrawals. This is an illustrative shock using the percentage in the market report, not a reconstruction of the account between 24 and 28 September.
| Calculation | Result |
|---|---|
| GLD value: 6.3 × 0.969 | 6.1047 |
| Other holdings and cash | 93.7000 |
| New portfolio value | 99.8047 |
| New GLD weight: 6.1047 ÷ 99.8047 | 6.1166%, about 6.12% |
| Weight change: 6.1166% − 6.3% | −0.1834 percentage points |
The denominator matters. Dividing the reduced GLD value by the old portfolio total would understate its new weight. Both the holding and the portfolio have lost value.
Under these assumptions, the position contributes a 0.1953% loss to the starting portfolio value: 6.3% × 3.1%. That portfolio loss and the 0.18 percentage-point reduction in weight are different calculations.
The resulting weight remains approximately 0.12 percentage points above my 6% target. This does not identify an executable trim either: a target, a tolerance band, a minimum trade size and a scheduled review rule are distinct parts of a process. I have not supplied a new tolerance rule here.
The rest of the portfolio can reverse the allocation conclusion
Using the same 6.3% starting weight and the same assumed 3.1% GLD decline:
| Assumed return on everything else | Resulting GLD weight |
|---|---|
| −5% | 6.42% |
| 0% | 6.12% |
| +5% | 5.84% |
These are hypothetical, independently calculated scenarios. “Everything else” includes cash and all other holdings as one aggregate; a 5% aggregate move does not mean cash itself earns or loses 5%.
The general formula is: new weight = w × (1 + g) ÷ [w × (1 + g) + (1 − w) × (1 + o)], where w is the starting weight, g the holding’s return and o the aggregate return on everything else. No external cash flows or trades are assumed.
The holding can fall in price and become a larger share of the account if the rest falls faster. It can also become underweight if other assets rise sufficiently. A headline about gold alone cannot distinguish those situations.
Gold and the energy pair are different exposures
Last week’s XOM and APA research examined the risk that lower oil prices would squeeze producer cash generation. An oil rebound offers some relief to that specific risk, for as long as stronger realised prices persist. It does not remove operating, capital-spending or valuation risks.
The same development can create a different test for GLD if it reinforces expectations of higher interest rates. This is a useful example of how one event can reach holdings through different financial channels.
| Exposure | Conditional effect of higher oil | What still needs evidence |
|---|---|---|
| APA | Stronger realised oil prices could support upstream cash generation | Costs, production, investment and the durability of pricing |
| XOM | Upstream may benefit; refining and chemicals have separate drivers | The combined effect across businesses |
| GLD | Inflation and policy expectations can alter the appeal of non-yielding gold | Real yields, the dollar and investment demand |
These are mechanisms, not predictions of share-price performance. I cannot conclude that energy gains offset gold losses without actual positions, prices and returns measured over the same period. Owning both is not an automatically effective hedge.
Changing the weight versus changing the target
Rebalancing and revising an investment policy answer different questions.
Rebalancing asks how actual exposure compares with the existing target under the portfolio’s rules. Changing the target asks whether the desired exposure itself should be different because the investment case, risk budget, liquidity needs or broader portfolio has changed.
A price move changes the first calculation immediately. It may also contain information relevant to the second, but it does not settle it. Raising a target simply because an asset has fallen risks turning an allocation policy into a response to recent prices. Refusing to reconsider a target despite material evidence would be equally weak discipline.
The strongest case for keeping gold is that its value to the portfolio may emerge in conditions different from today’s. The strongest objection is that the expected diversification may be less reliable, or more costly, than assumed. Both deserve evidence rather than a slogan about safety.
What I will check next
- Refresh the account: measure GLD, all other holdings and cash on the same basis, including any cash flows or trades since the snapshot.
- Reconcile exposure with the process: compare the updated weight with the target and actual execution rules. The 24 September no-trade result is historical.
- Review the economic case: distinguish nominal yields from real yields, assess the dollar and consider whether gold’s expected diversification role still holds.
- Review shared portfolio risks: assess the combined effect of energy, rates and equity exposure rather than judging GLD in isolation.
I would become more concerned if the holding repeatedly failed to provide the diversification expected of it in relevant stress conditions, or if maintaining it compromised other portfolio needs. I would become more comfortable if its contribution justified its costs and risk budget across a range of conditions. Neither judgment can be made from one trading session.
I still own gold. The next step is an updated portfolio check, not an assumption that a lower price requires a purchase.
Sources and freshness
- Market snapshot: Reuters’ 28 September report, specifically the 10:31 GMT spot observation and the reported FedWatch probability. January peak sourced to Reuters’ 22 September coverage. The approximately 26% drawdown is a calculation using those observations.
- Rates context: separate early-session 28 September reporting of the nominal 10-year yield; not a synchronised or live rate feed. No numeric real-yield claim is made.
- Instrument: official SPDR Gold Shares information for objective, benchmark and expenses, reviewed for this article.
- Portfolio: my reported 24 September snapshot, 6% target and no-GLD-trade reconciliation. These are author-supplied records, not a fresh account audit.
- Illustrations: all allocation outcomes are calculations with explicit assumptions. They do not update my current weight or determine a trade. The cover’s fissure is a visual metaphor for scrutiny, not a claim about physical bullion quality.
Disclosure: I own GLD, XOM and APA. My portfolio and views, not investment advice.