Gold, Silver Tumble in Biggest Daily Drop in Years as Stunning Precious Metals Rally Comes to a Halt

Commodity

Summary:

The move came amid easing trade tensions between Washington and Beijing, a rise in the US dollar, and technical indicators flashing overbought conditions.

Gold prices tumbled in their biggest daily drop in over ten years as a stunning rally in precious metals came to a halt.

Futures for the yellow metal (GC=F) dropped as much as 5.5% to hover near $4,141 per troy ounce, on pace for their largest one-day drop in 12 years.

Silver futures (SI=F) also tumbled more than 7% to mark their largest daily drop since 2021.

The move came amid easing trade tensions between Washington and Beijing, a rise in the US dollar, and technical indicators flashing overbought conditions.

"Gold had several attempts to push above $4,400, starting last Thursday. But on each occasion, it ran into resistance," Trade Nation senior market analyst David Morrison wrote in a note on Tuesday.

The key question now is whether the slide represents the start of a much-needed correction after a stunning rally year to date, he added. Gold, Silver Tumble in Biggest Daily Drop in Years as Stunning Precious Metals Rally Comes to a Halt_1

Gold, Silver Tumble in Biggest Daily Drop in Years as Stunning Precious Metals Rally Comes to a Halt_1

"The first major test to the downside comes in around $4,000," Morrison said. "But it's also quite possible that this is all we get from the dip and that buyers come back in around $4,200."

Investors bought the dip last Friday when gold briefly dropped more than 1.5%, a rare pullback during its recent surge, as precious metals and equities reached all-time highs in October.

"This is just a bump in the road," Sevens Report Research founder Tom Essaye told Yahoo Finance on Tuesday.

"You still have elevated inflation," he said. "You have low real interest rates. You've got geopolitical concerns, you've got US government disfunction. That's all a bullish cocktail for gold."

Gold has climbed 28% since mid-August amid central bank purchases and inflows into gold-backed exchange-traded funds (ETFs). Investors piled into the metal to hedge against trade tensions and a flight from fiat currencies.

"What would break the back of gold would be if all of the sudden we greatly reduced our debt — not happening yet — and peace broke out in the world," Michele Schneider, chief strategist at Marketgauge.com, recently told Yahoo Finance.

Wall Street remains bullish on the precious metal going into next year.

Bank of America analysts recently reiterated their "long gold" recommendation, forecasting a peak of $6,000 per ounce by mid-2026.

Meanwhile, Wall Street has been upping its price targets on gold. Goldman Sachs sees gold hitting $4,900 per troy ounce by the end of next year, up from its prior prediction of $4,300.

JPMorgan analysts said the yellow metal could hit $6,000 per ounce by 2029.

Source: Yahoo Finance

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Owen Li

Political

President Donald Trump has no plans to meet President Vladimir Putin in the immediate future, a White House official said, offering a more downbeat tone after the two sides suggested earlier that a second summit between the two leaders would happen soon.

The official, who asked not to be identified discussing private deliberations, said a call between Secretary of State Marco Rubio and Russian Foreign Minister Sergei Lavrov on Monday had been productive, and a meeting between the two officials also wasn’t necessary.

The statement, while lacking in detail, contrasted with remarks Trump made after speaking with Putin by phone last week. At the time he said he would meet Putin “within two weeks or so” and that Rubio and Lavrov would meet “pretty soon.”

The shift fit with similar remarks out of Russia, where the Kremlin also sought to tamp down expectations for a quick summit. Putin spokesman Dmitry Peskov said “the work ahead will be challenging,” according to the Interfax news service. “Preparation, serious preparation, is needed.”

Trump has ratcheted up his calls to end the war in recent days, urging the two sides to stop the war “at the battle line.” On Monday, he cast doubt on Ukraine’s ability to defeat Russian forces, and he’s also equivocated over military aid to Ukraine and the threat of new sanctions on Russia.

Ukraine President Volodymyr Zelenskiy was in Washington last Friday to try to persuade Trump to send Ukraine Tomahawk missiles and other support. But Putin got to Trump with a phone call the day before that meeting, and the two leaders agreed to meet in Budapest, Hungary.

At the time, Trump acknowledged that the prospect of a Budapest summit might be part of an effort by Putin to stall for time, especially after an August summit between the two men made no progress on ending the conflict. But Trump shrugged off concerns that Putin may be manipulating him and insisted the Kremlin wants to end the conflict that’s well into its fourth year.

Source: Bloomberg Europe

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Golden Gleam

Economic

Commodity

Gold is over the support of $4,200, which creates good buyer interest and may push the price up to the middle range resistance near the level of $4,300.

Further strength above $4,200 will provide a direction to $4,380, which is close to the upper limit of the current trading span.

The sharp declines in the recent past are all contained meaning that it could be reversing to the mean and short-term recovery of the market as the momentum turns in favour of buyers.

Gold (XAU/USD) is testing the important $4,200 support level associated with prior demand zones having previously triggered rebounds in the past. Current price action suggests possible upside momentum if price holds above this support level at $4,200.

Support Holds Near $4,200

Gold’s 1-hour chart shows the market approaching the lower boundary of the recent trading range around $4,200. Historical data indicates this zone has consistently acted as a strong demand base. Sellers have shown reduced strength near $4,217–$4,200, signaling possible defensive buying.

According to Ali _charts, “If gold holds $4,200 as support, a rebound to $4,300 or even $4,380 could follow.” This tweet reflects the market’s focus on defending the support level. Price structure suggests a potential “V-shaped” recovery, where buyers may step in aggressively.

Momentum indicators imply the recent drop has been contained within a short-term range. Sharp declines often precede mean reversion when demand enters the market, which could support a rebound toward higher levels.

Rebound Targets and Market Structure

If $4,200 holds, the first recovery target is $4,300, aligning with mid-range resistance from prior consolidations. This level could act as an initial zone for profit-taking by traders.

The second target stands at $4,380, representing the upper boundary of the current trading range. This area often serves as a liquidity zone where larger market participants may adjust positions. A bounce toward this level would signal a short-term recovery in price action.

A move back below $4,200 would likely open lower supports near $4,170, and draw additional defensive settlements into the market focus. Traders are eyeing this point for a potential shift in short-term trend and future buying reaction.

For now, the market’s direction largely depends on the defense of the $4,200 support. Holding this zone could allow gold to regain upward momentum and challenge the $4,300–$4,380 range efficiently.

Source: CryptoSlate

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Devin

Central Bank

The Bank of England warned of parallels between the $1.7 trillion private credit boom and the subprime debt crisis, as UK officials confirmed plans to subject the market to stress tests.

BOE Governor Andrew Bailey told a Parliament committee on Tuesday that “alarm bells” were ringing in the sector. He cited conversations with industry figures who assured him that “everything was fine in their world, apart from the role of the rating agencies,” in an echo of the confusion over the quality of debt in subprime debt securitizations almost two decades ago.

“I said, ‘Well, we’re not playing that movie again, are we?’” Bailey told a hearing of the House of Lords’ Financial Services Regulation Committee in London. “If you were involved before the financial crisis and during it, alarm bells start going off at that point.”

The comments by the British central bank chief, who also chairs the Basel, Switzerland,-based Financial Stability Board, are the latest warning about the world’s private credit market. Sarah Breeden, the BOE’s deputy governor for financial stability, pointed to the market’s opacity, leverage and its links with banks as some of the industry’s risks.

The sector has ballooned since the great financial crisis, driven in part by governments’ efforts to tighten regulation on commercial lenders and reduce risks. It’s also awash with cash from insurance firms, which require ratings for regulatory purposes. Firms are building more complex structures such as collateralized fund obligations with investment grade ratings, in part to accommodate insurance capital.

Concerns are mounting that any problems that emerge in the sector and the broader leveraged credit markets could quickly spread to banks and the wider economy after the recent collapse of US firms First Brands and Tricolor. Those cases prompted JP Morgan Chase & Co. Chief Executive Officer Jamie Dimon to warn that “when you see one cockroach, there are probably more.”

Private credit executives have hit back, saying the issue was in loans that banks led and shouldn’t be held up as evidence of growing risks enabled by newer players muscling into lending. Still, Bailey said it was still an “open question” whether cases like First Brands were a “canary in the coal mine.”

In the run up to the financial crisis, creative packaging of loans led to groups of risky credits rebranded as collectively safe securities. The result was hundreds of billions of losses, the collapse of Lehman Brothers and Bear Stearns and a global financial crisis that weighed on growth for more than a decade.

Bailey, who helped oversee the BOE’s efforts to rescue the banks during the financial crisis, specifically mentioned the “slicing and dicing and tranching of loan structures” among the trends the bank was scrutinizing. The BOE has been exploring the issue for several months, amid escalating fears about the standalone risks from private credit and the potential for those to spill over into the mainstream banking sector.

Bailey and Breeden confirmed a Bloomberg News report earlier on Friday that the central bank was speaking with firms about conducting a “system-wide exploratory scenario” to find vulnerabilities in the broad private credit market. The so-called stress test would use a similar model to last year’s review of risks to core UK financial markets.

“We can see parallels with the GFC,” said Breeden. “What we don’t know is how macro significant those issues are.”

The scrutiny comes as President Donald Trump in the US and Chancellor of the Exchequer Rachel Reeves in the UK encourage pension funds and others to invest in private markets. The US Government Accountability Office is also assessing the risks posed by private credit is expected to report back in the spring.

“Precisely how close to a tipping point we are it is hard to say,” said David Blake, director of Bayes Business School’s Pensions Institute. “This wall of money will create a bubble that will eventually burst.”

The BOE doesn’t have direct regulatory oversight of private credit markets and will need cooperation from firms to probe the risks contained within the sector. The political hurdle for new regulation would likely also be high, given the UK government’s push for fewer burdens on businesses and a global wave of deregulation.

Bailey told the Lords committee that he would seek other avenues before new rules. “Transparency is the first, in a sense, disinfectant.”

“We have to have a system that encourages risk to be taken and investment to be made,” he said. “My first reaction is, how can we improve that? I wouldn’t go to regulation as the first answer to that.”

Source: Bloomberg Europe

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Adam

Economic

Britain's inflation rate looks set to hit 4% in September in data due for release on Wednesday, the highest among the world's big rich economies and double the Bank of England's target.

The fast pace of price growth - while a lot lower than a peak of 11.1% in 2022 following Russia's invasion of Ukraine -puts a strain on households and means borrowing costs are likely to stay higher than in other countries, at least in the short term.

It also adds to the challenge for finance minister Rachel Reeves who has promised voters that she will ease cost-of-living pressures and speed economic growth but is likely to raise taxes in her budget next month, potentially adding to inflation.

Below is an explanation of Britain's price growth problem.

WHY IS UK INFLATION SO HIGH?

Britain's inflation rate was 3.8% in August, much higher than the euro zone's 2.0%.

A driver of British prices has been fast wage growth due in part to a worker shortage since the COVID-19 pandemic and increases to the minimum wage and employer taxes.

Like in other countries, energy and food prices rose earlier this year. Energy prices had exerted significant downward pressure on inflation in late 2023 and 2024.

WHAT ELSE IS DRIVING UK INFLATION?

Government-influenced prices are another factor. Higher sewerage charges, bus fares and vehicle excise duty and the introduction of value added tax on private school fees mean so-called administered prices in Britain have risen more sharply than in the euro zone.

Jack Meaning, chief UK economist at Barclays, estimated Britain's inflation rate in August would have been around 2.9 excluding the impact of tax increases in Reeves' budget last year and of administered prices.

While the BoE expects regulated electricity and gas prices to stop driving inflation in the coming months, food prices are likely to rise further.

Food retailers blame the increase in prices to date on a new packaging tax as well as the hike in employers' social security contributions and the minimum wage and global prices. The BoE fears higher food prices drive up inflation expectations which can lead to price pressures becoming embedded in the economy.

WHY DOES IT MATTER?

British households - excluding pensioners - have seen very little growth in their living standards since 2010, when taking inflation into account.

Wage growth is running not far above inflation and is slowing, limiting any recovery in spending power.

High inflation also adds to the government's debt bill - Britain has a bigger proportion of its bonds indexed to inflation than other countries, putting further strain on the budget at a time when other spending demands are rising too.

High inflation can slow long-term economic growth if it makes households want to save more to withstand future price shocks and deters businesses from developing longer-term plans.

WHAT'S LIKELY TO HAPPEN?

The BoE has forecast that consumer price inflation will peak in September but will only return to its 2% target in the April-to-June period of 2027.

Governor Andrew Bailey and his colleagues say the outlook for inflation is still unclear, making it hard to predict when interest rates are likely to be cut again.

Source: reuters

To stay updated on all economic events of today, please check out our Economic calendar

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Adam

Cryptocurrency

Big Bitcoin holders are moving their wealth from the blockchain onto Wall Street’s balance sheet.

A new generation of ETFs is giving the crypto rich a novel way to fold their digital fortunes into the regulated financial system — without selling, and through funds run by big asset managers like BlackRock Inc.

A regulatory change this summer opened the door for large investors to hand their Bitcoin to an ETF in exchange for shares of the fund. It’s called an in-kind transaction and is used across most ETFs, but was only approved for Bitcoin products this July. The process is generally tax-neutral, whereby no cash changes hands and no sale is recorded. The result is that a volatile digital asset becomes a line item on a brokerage statement — easier to borrow against, pledge as collateral, or pass onto heirs.

BlackRock has already facilitated more than $3 billion of these conversions, according to Robbie Mitchnick, its head of digital assets. Bitwise Asset Management says inquiries now arrive daily from investors wanting to bring their holdings onto wealth-manager platforms. Liquidity provider Galaxy has processed a handful of conversions so far, says Michael Harvey, its head of franchise trading.

Large Bitcoin holders are waking up to “the convenience of being able to hold their exposure within their existing financial adviser or private-bank relationship,” among other reasons for converting, Mitchnick said.

It’s the latest reinvention for the world’s largest cryptocurrency. Born as a decentralized revolt against mainstream financial institutions, Bitcoin is now being quietly absorbed by them. Its anti-establishment holders are warming up to the idea that some parts of finance are better accessed through the traditional system.

By exchanging their Bitcoin for ETF shares, investors can keep the same stake in the cryptocurrency while moving it into a form the financial system recognizes. Inside a brokerage account, that holding can be pledged as collateral, borrowed against or included in estate plans — things that are cumbersome, risky or impossible when assets sit in a private digital wallet. The ETF wrapper offers legitimacy and ease, turning what was once off-grid wealth into something banks and advisers can work with.

“There are still benefits of having things in the traditional financial system,” said Teddy Fusaro, president at Bitwise, whose firm executed its first in-kind transaction with the BITB ETF in August.

He gave an example of an investor with a $1 million portfolio housed on a wealth-management platform and a separate $5 million worth of Bitcoin on a ledger. “Your wealth management platform treats you like you’re a $1 million client,” said Fusaro. “If you bring your $5 million worth of Bitcoin into a Bitcoin ETF, and you now hold that on your wealth management platform, you qualify for a much higher level of service.”

BlackRock Is Pulling Bitcoin Whales Into Wall Street’s Orbit_1

BlackRock’s Mitchnick declined to comment on the exact number of transactions his firm has processed within the IBIT ETF, but said further regulatory clarity would expand volumes and participation from big banks. He said client inquiries range from investors looking to switch just 20% of their Bitcoin to ETF form, to holders looking to go completely TradFi.

“There is a subset who are just going 100/zero, saying ‘consolidate everything in this way, it’s the easiest way for me to hold this going forward,’” he said.

Meanwhile, more of Wall Street may soon be looking to take advantage of these in-kind transactions. BlackRock says banks are already playing a limited role in facilitating these trades — particularly in the ETF creation leg — even though only non-bank broker-dealers can currently handle the full transaction.

“Life is just easier in TradFi land — we’ve spent a century perfecting integration, access, and security. Bitcoiners are finally realizing that,” said Wes Gray, CEO and founder of ETF firm Alpha Architect, which specializes in tax-aware strategies. “The great irony, of course, is that Bitcoin was born to escape traditional finance — and now its biggest holders are trying to get back in.”

Source: Bloomberg

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Adam

Forex

After Beijing announced restrictions on rare earth exports, the White House initially reacted strongly. However, both sides are now showing willingness to continue talks. This softer stance has brought moderate optimism to stock markets, which are rising in both the US and Europe, while currency markets remain stable, with the euro trading around $1.16–$1.17.

Meanwhile, the ongoing US government shutdown and lack of major economic updates are unlikely to stop the Federal Reserve from cutting interest rates later this month. Important inflation data expected this Friday may show a slight rise in the CPI to 3.1% year-on-year.

EUR/USD Teeters Near Key Fibonacci Level Ahead of This Week’s US CPI Test_1

Will the US and China Strike an Agreement?

At this stage, both China and the U.S. have too much to lose to halt talks and rely solely on high tariffs and export controls. That is why Treasury Secretary Scott Bessent met with Chinese Vice Premier Lifeng, with discussions described as generally productive.

President Donald Trump also suggested that the November 1 deadline for the full 100% tariff may change, and negotiations will continue. Following these developments, the US dollar strengthened locally and may continue to do so if positive news from the Washington-Beijing talks persists.

The negotiations are expected to lead up to a Trump-Xi meeting in late October or early November in South Korea. However, given the complexity of global trade and the many points of potential disagreement, it is unlikely that a single meeting will produce comprehensive solutions, as past talks—like those between Trump and Putin—have shown.

Fed Signals Point Clearly to Another Rate Decision

Market expectations suggest another US interest rate cut next week. Fed officials, including Alberto Musalem and Stephen Miran, have indicated that at least moderate monetary easing is the right approach. However, this cut is already priced into the market, so unless there is a surprise, attention will likely shift to the December meeting, where another 25 basis point cut is expected with over 90% probability.

EUR/USD Battles to Maintain Downward Momentum

The recent decline in EUR/USD, which began late last week, has reached a key support area near 1.1630, where it aligns with the 50% Fibonacci retracement level.

EUR/USD Teeters Near Key Fibonacci Level Ahead of This Week’s US CPI Test_2

If this support area breaks, EUR/USD could continue lower, with a target near 1.1550. If the support holds and buying interest appears, the 1.1720 level remains the main resistance.