Gold and Silver Price Drop: Silver Off 14% in October

The gold and silver price drop is not one trade. Spot silver is off more than 14 percent in October, while gold is down about 3.5 percent to nearly 3.8 percent, depending on the Friday morning tally. ET Now had gold around 3.5 percent lower on the month with spot at $4,012.34 as of 5:48, and silver around $52, off more than 14 percent. Muhammad Umair at FXEmpire put the same month at nearly 3.80 percent for gold and more than 14 percent for silver. A book that still marks “precious metals” as one risk is long a silver beta it did not mean to hold.

Having tracked the gold-silver ratio since it sat between 60 and 70 through the summer, the gap is the story, not the direction. Metals Focus, on Kitco on 29 October, said the ratio had pushed above 76 for the first time since December 2025 and was still under its 2020 to 2025 average of 82. It has rallied more than 11 percent this year. GoldPrice.com closed Thursday with the ratio at 77.1. By 8:44 a.m. ET on Friday the same screen showed gold at $3,956.11 and silver at $50.01, a ratio near 79. This is the rates version of a quality-versus-high-beta equity selloff. Gold still has a monetary buyer. Silver’s extra demand was industrial, coin and speculative, and that demand has already left.

What the gold and silver price drop actually is

Both metals are priced in dollars and neither pays a coupon, so a higher funds rate raises the opportunity cost of holding either. The metal with the larger speculative and industrial overlay falls further. That metal is silver.

Thursday is the clean print. Silver’s 3.37 percent fall was about 2.9 times gold’s 1.15 percent drop from Wednesday’s $4,067.29, and the ratio finished at 77.1. Gold is down 7.9 percent in 2026 on that series, inside a 52-week range of $3,951.10 to $5,405. Silver’s range runs from $47.61 to $118.45, so Thursday was already near the year’s low. Jonesy (@HedgeyeDJ), director of research at Hedgeye, posted on Friday that gold was down 26 percent from its high. The closing-high math is 25.6 percent.

The month depends on the start date, which is why the wires do not match to the decimal. From $4,157.14 on 30 September, gold is down 3.3 percent. From the 1 October close of $4,177.39, the drop is 3.8 percent, Umair’s “nearly 3.80 percent.” ET Now’s 3.5 percent was struck at $4,012.34. None of those is a Friday close. The 8:44 a.m. ET screen at $3,956.11 was 1.6 percent under Thursday and about 4.8 percent under 30 September, and it can still change.

The listed products show the same split without pretending to be ounce prices. SLV’s 13.3 percent month is 4.1 times GLD’s 3.2 percent. GLD is also 25.7 percent under its 29 January close of $495.90, in line with that 26 percent social print. Sucden Financial had already put spot silver roughly 55 percent under the January record of $121.62.

Our own tape has followed the crack. Silver was under $54 for the first time in 2026 by the 23 October close, and Friday’s gold page has spot back under $4,000 on the way to a second monthly decline. The new information is that silver has done the damage.

Peter Spina, president of GoldSeek and SilverSeek, posted at 12:27 GMT on Friday: “Silver prices break below $50/ounce. Enters into critical technical-support zone.” That lines up with the $50.01 screen and with Umair’s map of support at $48 to $50. A break of that band, on his chart, opens $45 to $46. Gold’s line in the same note is $3,950, then $3,800.

Who is actually responding

The industry response is two books, not a joint defence of precious metals. On gold, Sucden said central banks bought an estimated 289 tonnes in the second quarter, including unreported deals. First-half buying was the weakest since 2022, and recent months have been stronger. The People’s Bank of China added 23 tonnes in September, 103 tonnes in 2026, a 23-month streak. Poland’s buying can slow as reserves near a 700 tonne target. Sucden’s line is the split: “Official-sector demand continues to provide the clearest fundamental floor.”

The investment book agrees only in part. Global gold-backed ETF holdings hit a record 101.55 million ounces in mid-October and were still close to 101 million. Managed-money net longs were at a four-month low, so fast money is lighter and the longer holder is not. Sucden does not think either bid beats another hawkish repricing. A move back above $4,300, on its view, needs oil, yields and the dollar lower.

Silver has no equivalent official bid, and the squeeze that carried it to $121 is gone. Metals Focus said London vaults held 932 million ounces at the end of September, with about 267 million ounces available outside exchange-traded products, nearly double the October 2025 low. Silver ETPs have shed about 60 million ounces this year. Primary bullion coin sales fell more than 80 percent in the second quarter from the first, the lowest quarter since that mint survey began in 2010. CME managed-money net longs were 17 million ounces, the lowest since February 2024.

The desks do not agree on the annual balance, and that disagreement is the point. Sucden, citing the Silver Institute’s World Silver Survey 2026, still expects a sixth consecutive deficit of about 46 million ounces, with solar use down 19 percent to about 151 million ounces. Silver ETFs, on the same note, hold about 805.8 million ounces after net selling this year. Metals Focus expects the deficit to narrow and a surplus in 2027. HSBC, as posted by MINING.COM on 30 October, sees 140 million ounces in 2025 shrinking to 5 million this year and 12 million in 2027. Year-end targets are $70 for 2026 and $65 for 2027. It does not expect silver to challenge $100 again soon.

Forty-six million, 5 million and a 2027 surplus cannot all be the balance. They can all say the shortage that justified $120 silver is no longer the base case. StoneX, in that MINING.COM post, expects silver to underperform gold. Its head of market analysis said “the big reversal in ETFs this year leaves the market oversupplied.”

Ole Hansen wrote on X on 27 October that the managed-money net long was 3,746 contracts, a 32-month low, while ETF holdings had risen to 25,100 tonnes, a seven-month high, from 24,300 tonnes in July. Thursday’s 77.1 ratio is already through the 74.66 line he said opens 82.30. Bart Melek, head of commodity strategy at TD Securities, has gold in a $3,900 to $4,250 range and silver stuck between $50 and $55.

Why the multiple is the trade

The chart is GLD and SLV, not ounce prices, rebased to 100 at the 31 December 2025 close. Both peak in late January. Silver then falls through the shaded October band while gold only bends. At the last bar, 29 October, GLD is near 93, down 7.0 percent, and SLV is near 73, down 26.6 percent.

A silver month of more than 14 percent against a gold month near 3 percent is not what a haven basket does when the shock is the same funds rate. The rate shock arrived after the scarcity trade was over, and the buying since July has not been large enough, on HSBC’s words, to power a new rally. A client long a precious-metals sleeve built in January is long something closer to silver’s October path than to gold’s. The September silver tape, near $64 after the first hike of this cycle, is the level this month has given back.

The Fed is the constraint, not the excuse

Inflation is too high for the cuts gold bulls want, and growth is too firm for the Fed to call the cycle finished. The Iran conflict reaches the metals as a reason to hold rates up, not as a haven bid.

The statement said: “The Committee decided to maintain the target range for the federal funds rate at 3-3/4 to 4 percent, in support of the Federal Reserve’s dual mandate.” It gave no path for the next move. Spot gold was last at $4,035.48, down 0.60 percent, in Kitco’s write-up of the 10 to 2 hold.

Chair Kevin Warsh, in opening remarks reported by Kitco, said: “The Committee believes that the accumulation of more information will help it determine the policy stance appropriate to ensure a timely return of inflation to the 2 percent goal. The Committee will deliver price stability.” He also said conditions have tightened for some businesses and households since September, and that he was “unwilling and unable to call them tight.” Melek’s reading of the same decision: “While hawkish, the Fed decision was less hawkish than it could have been.” He added: “Carry will be higher, and so will the opportunity cost of holding gold, as long yields remain elevated, suggesting that a material rebound is unlikely for now.”

Thursday’s data did not take December off the table. Third-quarter GDP grew at a 3.4 percent annualised rate, against 3.2 percent expected, and core PCE rose 0.3 percent in September for 3.1 percent on the year, on the BEA figures in our Thursday note. Umair’s Friday chart has headline PCE up 0.5 percent in September, from 0.3 percent in August, with annual core PCE still at 3.1 percent. Those are different series. Sucden, before the release, had September headline inflation at 3.7 percent, payrolls up only 29,000 and unemployment at 4.2 percent. Hiring has cooled. Prices have not.

Date the probabilities, and do not average them. Metals Focus put a December 25 basis point hike at 80 percent on Thursday evening, plus at least two more increases in 2027. ET Now on Friday cited CME FedWatch at 74.9 percent. Chris Zaccarelli, chief investment officer at Northlight Asset Management, told Kitco: “If it weren’t so close to the midterm elections, they probably would have raised rates today, and now it’s unlikely that anything will stop them from raising rates at the next meeting.” He said futures price two further hikes next year if the economy stays resilient. That “next year” is his, not Metals Focus’s 2027 line.

Sucden tied the constraint to energy. “The final quarter of 2026 has brought renewed macro pressure to commodity markets, with the Iran conflict pushing energy costs higher and complicating the outlook for monetary policy.” ET Now had Brent around $112 and WTI around $103 on Friday, and the dollar up about 0.4 percent in October against a six-currency basket. Gold has lost less, because the PBOC and the ETF book are still there. Silver has lost the month.

What happens next

Three paths follow from those books. They are the firms’ levels, not a FinanceFeeds target.

First, December tests floors published before Friday’s break. Sucden has gold around $3,900 and silver at $50 to $53. Melek has no material rebound while long yields stay high, inside the ranges in the table. Friday morning already had silver on $50. Umair’s closer risk, gold through $3,950 toward $3,800 and silver toward $45 to $46, is his chart if the Employment Cost Index, which he said markets were still waiting on, does not cool the hike odds. There is no ECI print in these notes.

Second, the ratio can rise even if gold stops falling. A ratio of 82, the 2020 to 2025 average and Hansen’s 82.30 neighbourhood, with gold near $4,000 is silver near $49. With gold at $3,900 it is silver near $48. That is arithmetic on their levels, not a forecast. Hansen also said a high-90s ratio would imply silver in the low $40s if gold stayed near $4,000, and that this was not his base case. I would not underwrite the high 90s.

Third, the exposed upside call is HSBC’s $70 year-end silver price. Seventy dollars is about 40 percent above a $50 spot, and the same note says the ETF rebuild is not enough for a strong rally. Sucden’s path to gold at $4,200 to $4,300 and silver at $57 to $60 by mid-January needs the Fed to look finished. Melek’s longer path, gold back toward the highs only once inflation tilts toward 2 percent, is a story for after the tightening. If StoneX is right that this year’s ETF reversal leaves silver oversupplied, $70 gives way before $50 does.

A book that added silver as “gold with torque” in January owns an asset whose physical premium has mean-reverted and whose macro beta has not. The gold and silver price drop ends, on these notes, when the hike path stops steepening or the ratio stops making new highs. Neither has happened on 30 October.

This is not financial advice.

FAQ

Why is there a gold and silver price drop in October?

Both metals pay no interest, and the market is pricing another Federal Reserve hike. The Fed held at 3.75 percent to 4 percent on 28 October, with two officials voting to hike now, and December odds on Friday were still in the mid-70s to about 80 percent. Brent around $112 has kept the inflation story alive. Silver has fallen more because its speculative and industrial bid was already fading.

How large is the gold and silver price drop this month?

Friday morning wires put silver down more than 14 percent in October and gold down about 3.5 percent to nearly 3.8 percent. From GoldPrice.com closes, gold fell 3.3 percent from $4,157.14 on 30 September to $4,020.57 on 29 October. Through Thursday, GLD was down 3.2 percent and SLV was down 13.3 percent. Those are different series. Do not mix a Friday live screen with a Thursday close.

What is the gold-silver ratio now?

It closed Thursday at 77.1, so one ounce of gold bought 77.1 ounces of silver, according to GoldPrice.com. Metals Focus said the ratio had moved above 76 for the first time since December 2025, from a summer range of 60 to 70. The 2020 to 2025 average is 82. A Friday morning screen near $3,956 gold and $50 silver put the ratio around 79.

Will silver keep falling faster than gold?

That is the base case in this week’s notes, for as long as hike odds stay high and London silver is no longer scarce. Metals Focus expects room toward a ratio of 82. Melek has silver between $50 and $55 while gold ranges from $3,900 to $4,250. A ratio of 82 with gold near $4,000 is silver near $49. That is arithmetic on their levels, not a promise.

Are silver ETFs still buying?

They are up from the summer and down on the year. Ole Hansen wrote on 27 October that holdings had risen to 25,100 tonnes, a seven-month high, from 24,300 tonnes in July, while the managed-money net long was at a 32-month low. Metals Focus counts about 60 million ounces of ETP outflows since January. HSBC says the rebuild is real and not large enough for a new rally.

What would stop the gold and silver price drop?

Sucden’s rebound, gold at $4,200 to $4,300 and silver at $57 to $60 by mid-January, needs oil, yields and the dollar lower, and a Fed that looks done. Melek does not expect a material gold rebound while long yields stay elevated. HSBC’s $70 silver target for the end of 2026 requires a demand rebuild the bank itself calls too small. Watch December, and whether the ratio stalls before 82.