The split between fast-money selling and steady ETF accumulation leaves gold finely balanced: if long liquidation is close to exhausted, structural buyers could provide a base, but a decisive break of trendline support would likely trigger another round of technical selling. This week’s Fed decision and oil prices are the near-term catalysts, since any renewed jump in energy costs that lifts rate expectations would add pressure. A gold-silver ratio above 74 signals that markets are pricing industrial demand risk and broader de-risking, leaving silver more exposed if equities wobble. Speculative positioning has already been pared, which reduces some of the forced-selling risk from here.
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Earlier:
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Gold’s slide below $4,000 is a positioning story more than a fundamentals one, with speculators heading for the exits while long-term ETF investors keep buying.
Summary:
- Saxo Bank said gold’s drop is notable because it came alongside a strong rally in US Treasuries, with momentum selling and long liquidation overwhelming the usual support from lower yields
- Spot gold briefly fell below $4,000 after Thursday’s break of support around $4,060 accelerated technical selling, putting it on course for its steepest weekly drop in months
- Silver fell toward an 11-month low near $54, pushing the gold-silver ratio above 74, also an 11-month high
- ETF investors have kept accumulating gold almost uninterrupted since July, and Saxo Bank says the correction does not necessarily invalidate the longer-term case
- Support sits at an ascending trendline near $3,985, with resistance around $4,060 and then $4,230
Gold’s slide below $4,000 an ounce is being driven by speculative selling rather than a breakdown in long-term demand, according to Saxo Bank, which said momentum-driven selling and long liquidation have outweighed influences that would normally support the metal.
The decline has been particularly striking because it has coincided with a powerful rally in US Treasuries, Saxo Bank said in a note. Falling bond yields would usually help gold, but this week the selling pressure has proved stronger. Spot gold briefly slipped below $4,000 during Friday’s Asian session after a break of support around $4,060 on Thursday accelerated technical selling. The metal was heading for its steepest weekly fall in several months and potentially its weakest weekly close since November, despite persistent geopolitical uncertainty and growing concern over the durability of the equity market rally.
Silver has fared worse, falling toward an 11-month low near $54. That has pushed the gold-silver ratio above 74, also an 11-month high, reflecting silver’s relative weakness amid broader risk reduction and worries about industrial demand.
Saxo Bank said the price action suggests short-term speculative selling is currently outweighing demand from longer-term investors, who have continued to build gold holdings through exchange-traded funds almost without pause since July, seeking protection against fiscal instability, currency debasement and geopolitical risk. A chart from the bank shows ETF holdings climbing back above roughly 100 million ounces, while speculative positions on COMEX have been pared back from recent highs.
The bank stressed that the correction does not necessarily undermine gold’s longer-term investment case, but said it shows that even assets with structural support can suffer sharp setbacks when speculative positions are unwound.
The focus now is on whether gold can stabilise. Saxo Bank highlighted an ascending trendline connecting the October 2025 and July 2026 lows, currently offering support near $3,985. The broken $4,060 level may act as initial resistance, ahead of a more significant barrier around $4,230. A lasting recovery is likely to require steadier energy prices, continued buying from central banks and ETF investors, and evidence that the recent wave of long liquidation has run its course.
This article was written by Eamonn Sheridan at investinglive.com.