Key Takeaways
- • Gold closed near $4,163 on the LBMA pm price, down 0.22% week over week, with immediate support at $4,114 and resistance between $4,151 and $4,522 according to StoneX's Rhona O'Connell.
- • Silver underperformed gold, with the LBMA price down 4.35% to $57.63, and StoneX expects a surplus equal to roughly seven weeks of global fabrication demand this year, or about eleven weeks including ETP liquidation.
- • Managed money cut its COMEX gold net long for a seventh consecutive week to 333t, the lowest since June 9, while the silver net long fell 25% to 874t.
- • StoneX says hotter-than-expected US inflation and higher September import prices could erode gold's positive sentiment, and it still sees medium-term downside risk absent a Black Swan event.
- • The Fed's next FOMC meeting is scheduled for October 27-28, and Fed Chair-level commentary from the IMF-World Bank meetings indicated the Fed would not signal its next rate move.
Summary
StoneX Bullion's weekly round-up, authored by Rhona O'Connell, Head of Market Analysis for EMEA and Asia, focuses on US inflation data released the prior week and the September import figures, and what they may imply for inflation expectations. According to the note, the negative market reaction to the stronger-than-expected US inflation numbers, combined with higher import prices, may erode some of gold's recent positive sentiment. Gold's technical structure is described as largely negative: the spot price tested and bounced off an upward trend line at $4,114, and key moving averages sit above spot, ranging from $4,151 (10-day) to $4,522 (200-day). StoneX identifies congestion between $3,959 and $4,117 and a further support level at $3,816, the Fibonacci 50% retracement of the run from February 2024 to the January 29 peak of $5,613.
Support for gold continues to come from reported official-sector net purchases, which StoneX views as more significant for the message they send about risk management than for their tonnage. Festival buying in India is picking up, with local prices trading at premia to London ahead of Diwali on November 8. StoneX notes that the array of fund managers publicly calling gold higher suggests much of their positioning may already be established, and that bank positioning differs from that of long-term investment managers. Absent a Black Swan event, the firm still believes medium-term risk lies to the downside.
Silver remains on the defensive, underperforming gold toward the end of the week amid concern over industrial offtake, including an expected temporary oversupply of solar cells and pressure on US high-tech stocks ahead of earnings season. Meta reports on October 21, Microsoft and Alphabet on October 28, and Amazon on October 29. Silver resistance is cited at $58.5 to $63.4 and then $72.0.
Positioning data shows managed money cut its COMEX gold net long for a seventh consecutive week by 12.1t to 333t as of October 13, the lowest since June 9, and down from a 450t peak on August 25. Silver positioning deteriorated more sharply, with the net long falling 25% to 874t, the lowest since February 10, as new shorts lifted the gross short to 1,584t. Meanwhile, COMEX gold stocks fell for a seventh straight session to 729t, while silver ETF holdings rose to 25,057t, their highest since March 25, with a 159t inflow on October 16 alone.
On the macro backdrop, StoneX recounts comments by Kevin Warsh, described in the note as Managing Director of the IMF, at the IMF-World Bank annual meetings. He characterized the US economy as resilient, said inflation still needs to be brought under control, and declined to signal the Fed's next move, stating "I don't prejudge meetings." He noted the Fed had "removed a dose of accommodation" with September's rate increase and described AI investment as probably the most consequential economic change in his lifetime. The FOMC is in blackout ahead of its October 27-28 meeting. Gold was at $4,172.23 in the prior week's reference, down 0.22% on the LBMA pm price, and up 1.8% year-to-date in rupee terms but down 4.0% in US dollar terms.
Support for gold continues to come from reported official-sector net purchases, which StoneX views as more significant for the message they send about risk management than for their tonnage. Festival buying in India is picking up, with local prices trading at premia to London ahead of Diwali on November 8. StoneX notes that the array of fund managers publicly calling gold higher suggests much of their positioning may already be established, and that bank positioning differs from that of long-term investment managers. Absent a Black Swan event, the firm still believes medium-term risk lies to the downside.
Silver remains on the defensive, underperforming gold toward the end of the week amid concern over industrial offtake, including an expected temporary oversupply of solar cells and pressure on US high-tech stocks ahead of earnings season. Meta reports on October 21, Microsoft and Alphabet on October 28, and Amazon on October 29. Silver resistance is cited at $58.5 to $63.4 and then $72.0.
Positioning data shows managed money cut its COMEX gold net long for a seventh consecutive week by 12.1t to 333t as of October 13, the lowest since June 9, and down from a 450t peak on August 25. Silver positioning deteriorated more sharply, with the net long falling 25% to 874t, the lowest since February 10, as new shorts lifted the gross short to 1,584t. Meanwhile, COMEX gold stocks fell for a seventh straight session to 729t, while silver ETF holdings rose to 25,057t, their highest since March 25, with a 159t inflow on October 16 alone.
On the macro backdrop, StoneX recounts comments by Kevin Warsh, described in the note as Managing Director of the IMF, at the IMF-World Bank annual meetings. He characterized the US economy as resilient, said inflation still needs to be brought under control, and declined to signal the Fed's next move, stating "I don't prejudge meetings." He noted the Fed had "removed a dose of accommodation" with September's rate increase and described AI investment as probably the most consequential economic change in his lifetime. The FOMC is in blackout ahead of its October 27-28 meeting. Gold was at $4,172.23 in the prior week's reference, down 0.22% on the LBMA pm price, and up 1.8% year-to-date in rupee terms but down 4.0% in US dollar terms.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.