Gold prices lower, yet uncertainty is piled higher
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Why did gold prices drop sharply despite recent all‑time highs?
Well, has been a bit of a sell-off of gold overnight, but coming off all time highs, of course. So where is the money going? Well, some of it is going into US equities, although that struggled to stay in the green today. Canada's CPI has given the Bank of Canada something to think about. And in the absence of government data, well let's have a look at company earnings. Netflix amongst them coming out very soon. It's Wednesdays, the twenty second of October, twenty twenty-five. It's the morning call. from Nab. Good morning. Well, a mixed session for US stocks. The Dow is up naught point six percent, the S P naught point two percent, the Nasdaq down, shares up in Europe though, the US dollar has climbed a third of one percent, the Aussie down almost naught point four percent below sixty-five US cents now, and a naught point eight percent drop in the yen.
Bond yields generally lower, for ten years down two basis points for treasuries, down three in Germany and the UK, and oil has edged up 0.6% higher for Brent. Gold though has fallen. Five and a half percent uh in this session. Silver down more than seven percent. Nabs Ray Atrol uh is with me. Uh so it looks like we might have just hit peak gold. I mean that is quite a fall for one session, isn't it, mind you? I mean it we've also got a stronger US dollar, I guess. So, you know, more gold for your money, that will have contributed to part of it. But five and a half percent.
Morning Phil. Yes, it's a big move. I think it's the biggest move one day move that we've seen in gold and silver since uh twenty twenty. So that's almost uh you know the biggest move we've seen for five years. I uh there isn't doesn't seem to be an obvious catalyst, but then you know, just think about how far we've run up. And um I was um reminding myself of the uh of the weekend podcast from two weeks ago with with John Reid from the Gold Council and um you know one of the obvious observations that he made, which I think is pertinent, is that, you know, the the the sort of the marginal buyers of gold have certainly shifted um this year. You know, the the run up that we've seen we've seen in the last sort of year or two has very much been driven by emerging markets and central bank gold demand, whereas this year we've certainly seen it's been sort of Western investors, um, you know, more speculative of component to that.
I mean there's a obviously that number that what is it, twenty-six billion dollars worth of ETF buying of gold this year. That's clearly from sort of retail and uh private sector investors. So that obviously means that, you know, some of the recent um long positions in gold are in much less safe hands, I would suggest, than uh than central banks, for example.
How are US equity moves and a stronger dollar influencing gold and silver?
So you know, and you know and I'm also just reminding myself of you know the year to date moves that we've seen. So prior to today's correction You know, we've seen a six what if it's a sixty five percent year to date increase. And if I look across equity markets or Bitcoin, you know, the S P is up fourteen and a half percent. Um Hank Zang.
But isn't that curious? I mean does that that how that normally doesn't happen that you see gold and equities going up at the same time and normally an inverse relationship.
No, I mean that's one of the the the strange things is that um you know there's a what do you want to call it cognitive dissonance or whatever but um you know the phenomenon of gold and equities being as highly correlate positively correlated as they have been is quite unusual, although there are several episodes in history that I have to say, you know, without alarming anybody have often preceded significant uh, you know, global market corrections. Um but you know From a bit of the point of view of saying, well, you know, gold is traditionally seen as the ultimate safe haven and it's rallying like uh you wouldn't believe, and equity markets, you know, year to date are showing gains of of twenty to thirty percent.
So it's almost like yes, we want the risk sentiment, but we're also very risk averse.
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Chapters
6 chapters
1
Why did gold prices drop sharply despite recent all‑time highs?
0:01–2:27
2
How are US equity moves and a stronger dollar influencing gold and silver?
2:27–5:26
3
What does the recent surge in retail ETF buying mean for gold’s safety?
5:26–8:44
4
Why are gold and equities moving together instead of inversely?
8:44–11:46
5
How are Trump’s comments on a possible US‑China meeting affecting market sentiment?
11:46–14:19
6
What impact does Canada’s CPI surprise have on the Bank of Canada’s policy outlook?
14:19–14:23