Oct 2026

Weekly round-up for StoneX Bullion

By Rhona O'Connell, Head of Market Analysis

While this piece covers gold and silver, we want to point out that the outright Managed Money short position in palladium last Tuesday was, at 16,003t, the largest since end-April 2025 – so beware – a short covering rally does not necessarily herald a bull market.

This week’s report concentrates on the inflation figures from the States last week, the September import figures and what they may imply for inflationary expectations. We published the following text late last week, and precis plus link to it here, below the Opinion paragraphs.

Opinion is largely unchanged

There is still a body of support for gold stemming from continued press comments about official sector net purchases (which in our view is more significant for the message that it sends to the markets about risk-management than the actual tonnage) and this is helping to put a floor under the price.

The negative reaction to the US’ aggressive inflation numbers last week, along with higher import prices for September, suggest that some of the positive sentiment may become eroded. The technical construction is also largely negative. The spot price tested and bounced off its upward trend line at $4,114 and the key moving averages are all above the spot price, ranging from $4,151 (10D) to $4,522 (200D). There is a body of congestion between $3,959 and $4,117 then the next technical line of support comes from the Fibonacci 50% retracement of the run from February 2024 to the 29^th January peak of $5,613; i.e. at $3,816.

Meanwhile as we noted last week, the array of professional fund managers who are calling gold higher suggests that much of their investment may have been done already – after all, most shrewd investors would establish their positions in any asset before publicly expressing clear opinions. The banks. of course, are a different matter as their role in the market is not the same as long-term investment managers. So absent a Black Swan (and any more Black Swans would be unwelcome), we still believe that the medium-term risk lies to the downside.

That said, Festival buying is picking up in India with local prices posting premia to London. Diwali starts on 8^th November.

Gold; immediate support $4,114. Resistance $4,151 - $4,522

Source: Bloomberg, StoneX

Silver remains on the defensive, substantially underperforming gold towards the end of last week, as the market continues to fret over potential threats to industrial offtake – not just the much-mentioned (temporary) over supply of solar cells, but also the pressure on the high-tech stocks in the US at least, and ahead of the earnings season, which starts this week with Meta reporting on the 21^st; Microsoft and Alphabet report on the 28^th and Amazon on the 29^th.

We are expecting silver to throw off a surplus equivalent to roughly seven weeks’ global fabrication demand this year. If liquidation from ETPs is taken into account then that excess rises to roughly eleven weeks’ demand.

Silver resistance from $58.5 to $63.4 and then at $72.0

Source: Bloomberg, StoneX

Recent background

The Federal Open Market Committee is now in blackout ahead of the meeting scheduled for next Tuesday and Wednesday 27-28^th October. This gave added emphasis to the fireside chat last week between Kevin Warsh the Managing Director of the IMF at the IMF-World Bank annual meetings. The essence was that the US economy looks resilient, inflation still needs to be brought under control, while, as is to be expected, he would give no hint about the Fed’s next rate move. He was positive about US momentum, pointing to a widening investment surge, including spending beyond AI, as a source of economic tailwinds. He also considered that the global economy had held up better than he would have expected amid geopolitical shocks and tighter monetary policy.

He reiterated that the Fed would deliver price stability and said it had “removed a dose of accommodation” with September’s rate increase. He described rising prices as a shared challenge among central banks, and their coordinated tightening as leaving “no free riders.” But he declined to say whether the Fed would raise rates again in October or December: “I don’t prejudge meetings.” Meanwhile as far as recent data were concerned, US inflation weas higher than expected (see below) and payroll growth has eased; this is broadly in line with Fed expectations.

He called AI’s arrival probably the most consequential change to the US and global economy in his lifetime. His distinction was that AI investment is boosting demand now, before its productivity gains lift supply; that can add to inflation in the short run. Over time, he expects AI to raise productivity and wealth, though he warned the transition will be “very bumpy,” with employment effects over the next 12–18 months uncertain. The Fed’s productivity and jobs task force is due to hold a field hearing in the San Francisco Bay Area on 16 November to examine AI’s effects on productivity and employment.

The correlation between Brent and the10Y yield is still high, but easing

Source: Bloomberg, StoneX

Key long bond yields, long-term and the 5Y-30Y spread; yield curve continues to flatten

Source for both charts: Bloomberg, StoneX

COMEX gold stocks fell for a seventh consecutive session, easing by 1.6t, or 0.2%, in the week to 16th October to 729t, their lowest since 29th September; both dates lie after the closure of the Gold Enhanced Delivery Contract, so the comparison is like-for-like.

The ETFs added 2.1t, or 0.1%, to 3,147t.

Managed money cut its net long for a seventh consecutive week, by 12.1t, or 3.5%, to 333t as of 13^th October, the lowest since 9^th June, taking the reduction since the 450t peak on 25^th August to 117t. Long liquidation of 7.3t was accompanied by 4.8t of fresh shorts, which lifted the gross short to 54.9t, its highest since 7^th July.

Silver positioning deteriorated sharply again: the net long fell for a third week, by 297t, or 25%, to 874t, the lowest since 10^th February, as 195t of new shorts took the gross short to 1,584t, the highest since 27^th January, alongside 102t of long liquidation. The physical market moved the other way.

COMEX stocks recovered from 10,260t on 12^th October to end the week 60t, or 0.6%, higher at 10,381t, and the ETFs gained 113t, or 0.5%, to 25,057t, their highest since 25^th March, with 159t added on 16^th October alone, the largest daily inflow since 22^nd September.

Gold COMEX positioning, Money Managers (t)

Source: CFTC/ Bloomberg, StoneX

Declining open interest in both gold and silver on COMEX

COMEX Managed Money Gold Longs as % of 1st continuation Open Interest

Source: Bloomberg, StoneX

COMEX Managed Money Silver Positioning (t)

CFTC/Boomberg, StoneX

COMEX Managed Money Silver Longs as % of 1st continuation Open Interest

Source: Bloomberg, StoneX

The S&P, gold and copper, S&P/gold correlation steady at 0.51 while S&P:Cu correlation is also steady; latest at 0.41