10.26.26 - Gold and Silver Are Getting Closer to a Turn

10.26.26 - Gold and Silver Are Getting Closer to a Turn

Gold last traded at $4,016 an ounce. Silver at $53.94 an ounce.

Gold and Silver Are Getting Closer to a Turn -ZeroHedge

Authored by GoldFix

Bottom Line: We think gold and silver are getting closer to the point where the selling stops and a rally begins. We are not bullish yet. Copper longs are still being liquidated, silver shorts are still being added, and gold has sold off despite falling yields.

Morgan Stanley's Nick Savone drew attention to the October 22 gold move in his Global Reflections recap:

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)

UBS's trading desk also flagged the poor response to falling yields, describing gold as "still trading in conjunction with risk assets as opposed to underlying macro fundamentals."

We read the move as liquidation overwhelming the usual support from rates.