Precious metals prices fell sharply in October. Yet ETF investors continued adding metal to their holdings. For us, this divergence is one of the most interesting signals in the current market. The sell-off damaged the charts, but it did not drive every buyer away.
Gold has now recovered above $4,100 and silver above $52. Both metals have reclaimed the levels we identified as important first steps toward recovery: $4,000 for gold and $50 for silver.
In our previous Market Pulse, we emphasized that simply crossing these levels would not be enough. Silver’s retreat below $50 on Tuesday justified that caution. The subsequent rally, however, shows that buyers have not given up.
We now need to see whether they can defend the ground they have regained when another wave of selling arrives.
Gold & Silver Snapshot
| Indicator | Gold | Silver |
|---|---|---|
| Latest spot bid, USD per troy ounce | $4,124.10 | $52.61 |
| Change: October 29 afternoon quote → November 5 intraday | +2.47% | +0.82% |
| Potential support area to watch | $4,000–4,025 | $51.40–52.20 |
| Key resistance area | $4,145–4,200 | $54.00–54.70 |
| Managed Money net long position, October 27 | 105,562 contracts | 3,321 contracts |
Silver Is Back Above $50. Buyers Must Deliver the Next Confirmation.
We view silver’s recovery above $50 as a positive development. In our November outlook, we identified its ability to reclaim this threshold as one of the first potential signs of weakening selling pressure.
The price has also moved above the $51.40–52.20 area, which we previously identified as an obstacle to recovery. If this area becomes support during the next pullback, the recovery will have a more convincing foundation. For now, that remains a condition we want to see fulfilled.
Gold’s progress is also encouraging. Reclaiming its previously lost psychological threshold has met the first condition for a more constructive short-term view.
No new COT data have been released since our previous edition. The October 27 report showed a modest weekly improvement in gold funds’ positioning, although this did not reverse the broader deterioration during October. For silver, short covering remains a potential source of support.
That is still a scenario, rather than a confirmed explanation for the current rally. The next positioning update will help us distinguish between sellers stepping back and new buyers entering.
Investors Held More Metal Even as Prices Fell
Today’s World Gold Council report provides further evidence of the investment-demand resilience we have been monitoring. Global gold ETFs increased their holdings by 19 tonnes to 4,275 tonnes during October.
The dollar value of their assets nevertheless fell by 6%. Lower fund values therefore did not signify a widespread investor exit. The amount of gold held actually increased.
However, the pace of additions slowed. October’s increase was smaller than September’s 67 tonnes and followed 211 tonnes accumulated during the third quarter. European and Asian demand offset North American outflows.
For us, this is an important counterweight to the negative impression left by the price charts. Demand survived the decline, even though it could not outweigh other selling pressures. If those pressures ease, persistent investor interest could support the recovery.
We see a similar contrast in silver. SLV reported holdings of 506.435 million ounces on November 4, compared with 497.876 million on October 21. That represents an increase of approximately 8.559 million ounces.
This is an increase in the quantity of metal, rather than merely a rise in the dollar value of assets. It does not prove a shortage across the silver market. Continued additions across products in our ETF holdings tracker would, however, strengthen our confidence in the resilience of investment demand.
Macro Conditions Help, but the Obstacles Remain
Post-election weakness in the dollar and declining nominal U.S. Treasury yields accompanied the return of buyers to precious metals. Lower oil prices could also ease inflation concerns and pressure for further interest-rate increases.
We welcome that relief. However, real yields have not shown the same clear improvement during this week.
According to the U.S. Treasury, the ten-year real yield stood at 2.64% on November 4. It had declined from early October but remained slightly above Monday’s reading.
Today’s preliminary productivity report showed third-quarter unit labor costs falling at a 0.7% annualized rate, following a revised 1.9% increase. Meanwhile, initial jobless claims declined to 189,000.
We therefore see easing cost pressures alongside a still-resilient labor market. This could soften inflation concerns, but it also leaves the Fed room to maintain restrictive policy. Economic resilience supports silver through industrial demand, while high interest rates can constrain investment interest.
What Could Change Our View
- November 6, 14:30 CET: October employment report. We will watch wages, unemployment and revisions. Resilience in metals despite strong figures would be encouraging.
- November 6, 21:30 CET: COT report, covering November 3 positions. It will capture Friday’s sell-off, but not Wednesday’s post-election rally.
- November 10, 14:30 CET: October CPI. Persistent price pressures could undermine the current macroeconomic relief.
- The next support test and further ETF holdings updates. We want to see buyers defend reclaimed levels alongside continued investment demand.
Our Market Read
Gold: bullish in the short term. Reclaiming the price threshold we previously identified, alongside resilient ETF holdings, supports a more constructive stance. That view now depends primarily on buyers’ ability to hold the levels they have regained.
Silver: cautiously bullish, with further confirmation needed. Reclaiming $50 is an important positive step we wanted to see. Tuesday’s setback highlights the recovery’s fragility, but the subsequent move above another price hurdle improves the picture. Successfully defending the reclaimed area would strengthen our confidence.
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