The Number That Is Crucial

Gold traded at $3,998.72 early Friday in Asia, down 0.63% on the day, and briefly hit an intraday low near $3,986. That left the precious metal roughly 22% under the record of $5,110.50 it set on Jan. 26.

The damage started Thursday as silver sank 5.8% and gold 2.8%, putting the latter’s lost market value at about $810 billion and the former’s at more than $190 billion. Platinum fell 4%, palladium 3.7% and copper 2.8%. By early Friday, analysts estimated the two-day wipeout had amounted to over $1.3 trillion, with silver at its lowest level in 11 months.

The Trend That Started on Thursday

Two primary forces hit at once:

• Oil spiked on Iran war fears, with Brent up about 3.8% to $112.92, and that revived inflation worries.
• Futures traders responded by betting on higher rates and CME FedWatch data showed close to 90% odds of a Federal Reserve hike in December, a heavy weight on an asset that pays no yield.

At the same time, AI stocks cracked, with the Nasdaq posting its worst day since June and the S&P 500 its worst since July. Normally, a stock rout sends money into gold, but this time investors bought Treasuries instead.

The 10-year yield fell about 17 basis points to 4.96%, and inflation-adjusted yields eased, yet gold still fell. Analysts flagged forced selling as a plausible cause, though they noted the extent of liquidations “remains unverified.”

Brandt vs. Schiff

Veteran trader Peter Brandt could not resist providing his thoughts on the aforementioned developments. He posted a gold futures chart, stating that he was “not predicting it,” but if the slide continues, the “entire 2025 advance gets erased.” He then tagged Schiff directly, adding:

That would not be according to your [Schiff’s] script.

When a follower asked about the timeline, Brandt replied “Maybe 3 to 5 years” while in another reply he said there is “a very good chance” the commodity bull is “on its way to the butcher’s shop.”

Less than a week ago, Schiff told followers that “Gold at $4,145 is a gift.” Anyone who took that advice is now down about 3.5%.