Nov 2023


Nov 2023

StoneX Bullion round-up Monday 20th November 2023

By StoneX Bullion

Weekly roundup for StoneX Bullion 20 November 2023

Gold still consolidating; Fed still attracting attention; Diwali vibrant

  • Gold trading a $61 range over the past fortnight
  • Currently slightly lower on balance, holding around $1,970
  • Silver has been more positive, after dropping towards $22 it rallied hard to more than $24 before easing
  • While gold’s range was 3.2% (as a percentage of the low) over the week, silver’s was 10.3%, which is wider than the normal 2-2.5 beta
  • Much of the silver move looks like short covering

The past fortnight can be divided into two more or less equal parts, with gold and silver prices declining in the first half and rallying in the second. In the first week the markets came under pressure as a number of Fed officials took a cautious stance over the prospect for interest rate cuts. Most notably towards the end of the week, Fed Chair Powell said that the Fed would have no compunction about additional policy tightening if necessary. This helped to keep gold on the defensive, despite the fact that he was saying nothing different from previously, noting that the Fed would proceed with care (as they clearly don’t want to derail the recovery).

Gold; still consolidating

Source: Bloomberg, StoneX

Since then the atmosphere has changed slightly with a series of numbers suggesting that the recovery is slowing (retail sales undershooting, a 0.5% fall in the monthly Producer Price Index, a fall in manufacturing production capacity utilisation to 74.7% and falls in both import and export prices, although the latter could be a function of dollar strength). This helped give gold some renewed strength, although as we note above, ranges have been narrow.

Gold, silver and the ratio; year-to-date

Source: Bloomberg, StoneX

Silver’s move in the second half of the period might be seen as surprising given that 60% of silver demand is industrial and that gold wasn’t moving by much, but there were two days in which the rally was short and sharp, and this does suggest short covering and technically-driven activity.

At the fundamental end of the market, Dhanteras and Diwali were celebrated last week; traditionally the most auspicious days of the Hindu calendar for giving and receiving gifts, notably gold. This year was a lively one as post-COVID pent-up demand coursed through the Indian populace. In dollar terms, gold imports into India in October were reportedly up 95% to $7.2Bn and silver imports were up by 125% to $1.3Bn. Demand was robust despite high prices and particularly so for silver.

Gold in rupees; seasonality chart

Source: Bloomberg, StoneX

It is also interesting to note that there was a substantial outflow of silver from the LBMA vaults in October, with some 1,192t (4%) and some of this could very well have been destined for India. Metals Focus regularly monitors Indian flows and the most recent publication says that preliminary figures show Indian silver imports of 1,180t; this is a 23% y/y jump and 757% M/M! Looking at the chart suggests cumulative imports over January-September were only ~970t (and compare that with a typical 4,000-6,000tpa historically). The years 2000-2001 were much lower while 2022 were sky high, with about 10,000t feeding the pent-up post-COVID interest. It does look as if they were on fire in October; and there had been a reasonable dip in the rupee price during the month. India is unlikely to be the whole answer to the LBMA drawdown, but must have had an influence.

Source: Metals Focus

Futures positioning;

Gold: dropped from $2,007) on 30th Oct to a low of $1932 on the 13th; rally started n 13th and spot closed at $1,964

Negative sentiment returning for the most part with longs down by 24t (5.5%) and shorts up 19.4t or 10%. Net long down 18% to 200t from 243t and vs a 12M average of 194t.

Gold COMEX positioning, Money Managers (t)

Source: CFTC, StoneX

Silver: price dropped from $23.30 on 3rd November, bottomed at $21.88 on the 13th, closed $23.07 on the 14th .

The reverse of gold with a 20% (819t) increase in longs and a 5.1% (207t) contraction in shorts; net long bounds up from 56t to 1,078 against a 12M average of 1,761t.

COMEX Managed Money Silver Positioning (t)

Source: CFTC, StoneX

Exchange Traded Products

In the ETP sector, the first half of November has seen the sellers again with the upper hand, with a loss of 16t in the period to 10th November and an estimated four tonne contraction in the following week. There has been some scattered buying, generally at the lower prices and no interest as yet into the rally; but nothing of note, leaving the holdings at the end of last week at 3,234t, a drop year-to-date of 238t. For context, world gold mine production is roughly 3,700t.

Silver has been similar, with sporadic days of net purchase, but sentiment has remained cautious, unlike the slight shift in sentiment among the Money Managers on COMEX. Unlike gold there was little by way of reaction to falling prices; buying had no real pattern to it. For November to date the funds have shed a net 174t (less than 1%) to 21,961t. World silver mine production is in the region of 26,000tpa.


There is still no overriding force in place to move these metals out of their prevailing ranges. Attention should now turn to the Middle Eastern envoys that are going to China and other south-east Asian nations in an effort to try and broker peace in the Israel/Hamas conflict; if stalemate persists then gold should continue to find some support, but progress could take prices lower.

Source: Bloomberg, StoneX