Gold Sold Through a Bond Rally
Gold fell 2.8% despite a 2.9% pullback in the Nasdaq, a 0.2% drop in the dollar and 17bps decline in US 10Y yields (including a 14bps decline in US 10Y real yields). Yesterday would have appeared for all intents and purposes to have been a strong setup for Gold, especially given that correlations with UST yields have been deeply negative, unlike at the start of the year when Gold was behaving like a risk asset. To put the moves into context, the last time Gold performed this badly on an equivalent move in US 10Y yields was December 2008. (via ZeroHedge)
We read the move as liquidation overwhelming the usual support from rates.
Buyers Are Appearing on the Swap Desks
The fresh long buying is constructive to us, although swap dealers remain net short in both metals. More silver shorts also mean more potential buying if those traders are forced to cover.
Why Copper Matters to Silver
Managed Money High Grade Copper unwinds extended through mid-October per Commitment of Traders. Weakness in several demand indicators - namely AI and China - caused the bearish flows. Yet again, length transferred to more physically oriented players. Thereafter, similar price dynamics ensued. Speculative positioning further deteriorated. While US-China competition may limit the downside, note price remains dangerously close to a momentum shift.
We have seen some CTAs add to silver shorts as they liquidate copper longs, sometimes going short copper as well. Once the copper long is gone, some start covering silver. We therefore still expect silver selling while this unwind runs its course, but are watching the silver/copper spread for evidence that the pressure is beginning to ease.
Gold and Silver Draw Closer https://t.co/f6e7msjkTU
— VBL’s Ghost (@Sorenthek) October 26, 2026