Gold Rebounds From a 13-Month Low — and We're Still Not Buying

MARKET SNAPSHOT

October PPI landed at +0.3% month-over-month against a +0.4% forecast at 8:30 AM ET this morning — a slight undershoot that pulled gold off Thursday's 13-month low of $3,852 to an intraday high of $3,918 before settling near $3,895. The annual PPI rate came in at +6.5% year-over-year, the highest reading since November 2022, sustaining the stagflationary concern that has pressured metals all week. The CME FedWatch Tool now prices an 89% probability of a December rate hike, with roughly an 11–15% tail on a 50-basis-point move. The LBMA London PM fix on November 12 was $3,945.75, down from $4,050.25 on November 11 — a $104.50 single-session decline in the formal London benchmark that illustrates the week's severity. The Shanghai Gold Exchange carried a +1.46% premium over London spot on the most recent available data (November 10), signaling that Chinese physical demand remains active despite the paper-market selloff. CFTC Commitments of Traders data through November 3 shows gold open interest at 399,169 contracts with managed money net long positions at +179,500 contracts; silver open interest stands at 115,583 contracts with swap dealer short positions at 44,247 versus 22,629 longs — positioning data that lags the subsequent price break but reflects the speculative orientation heading into the week's selling.

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MARKET CONTEXT

This was always going to be a week measured in retrospect. On Monday, gold sat at $4,148 — within reach of a fresh all-time high, with the trade trending constructively and the structural bid from central banks and ETF flows looking as intact as it had all year. By Thursday, gold had hit a 13-month low of $3,852 intraday, silver had cracked the $50 floor during London hours, and the week's total decline stood at roughly 3.6% — the worst weekly performance since mid-year.

What happened? A single macro data point, amplified by one of the most hawkish Treasury market moves in months. Tuesday's Consumer Price Index came in hot, and the bond market responded with the conviction of a market that had been waiting for permission: the 10-year Treasury yield surged approximately 40 basis points in three sessions to 5.13%, a level that mechanically pressures every non-yielding asset on the board. Gold doesn't pay interest. When investors can earn 5.13% with government backing, they recalculate. Some of them sell.

This morning's PPI data gave the market partial relief. The slight undershoot — 0.3% versus a 0.4% forecast — triggered bargain-hunting from Thursday's low, lifting gold back toward $3,895. That is a real move. It is also, in the context of a -6.1% cumulative five-session slide, a technical reflex rather than a regime shift. The annual PPI rate at +6.5% year-over-year is the highest since November 2022. The Fed's December meeting remains 25 days away, and markets are pricing near-certainty of another hike. One soft monthly print does not dissolve that path.

The international picture adds texture the domestic rate story alone cannot supply. The People's Bank of China added 25.8 tonnes of gold to its reserves in October — the largest single-month purchase since the PBOC resumed buying in late 2024, extending an unbroken 24-consecutive-month buying streak to approximately 2,435 tonnes total, per data published through the State Administration of Foreign Exchange. China added 129 tonnes in the first ten months of 2026 — the largest declared official-sector total of any public buyer in that period per World Gold Council Q3 Demand Trends. Meanwhile, the SGE's +1.46% premium over London spot indicates that Chinese physical buyers are still paying up despite the paper-market repricing. That is a significant structural signal: price-insensitive sovereign buyers are accelerating pace precisely when Western speculative money is retreating.

Global gold ETFs attracted $2.7 billion in net inflows during October — the fourth consecutive positive month globally — per the World Gold Council, bringing the year-to-date total to +$41 billion and +246 tonnes, the third-strongest year on record. European funds led October flows at 44%, Asian funds at 45%. The domestic US picture looks more complicated: American-listed gold ETFs saw outflows in October that partially offset the global trend. This divergence — overseas and institutional channels constructive, US domestic channel rotating — is the defining tension in the current market.

In Australia, Guardian Gold reported gold at $3,879 USD ($5,699 AUD, down 2.2% in Australian dollar terms) in its overnight summary. The Perth Mint's November sales data shows 66,710 ounces of gold coins and minted bars alongside 875,487 ounces of silver products, with management citing "unprecedented silver demand creating logistical challenges." In London, the LBMA fix documents the week's severity. In Dubai, the Dubai Precious Metals Conference convenes November 16–17 at the DMCC — industry leaders from across the Middle East and global trade infrastructure gathering next week.

Silver sits at $49.97 — essentially flat on the session but carrying the weight of this morning's London-hours breach below $50. The Silver Institute and Metals Focus project a 46.3-million-ounce supply deficit for 2026, the sixth consecutive annual deficit. Silver is primarily produced as a byproduct of copper, lead, zinc, and gold mining rather than from dedicated silver mines, which means mine supply responds slowly to price signals. Perth Mint's "unprecedented demand" language is not marketing language — it reflects a physical absorption dynamic that the derivative wrapper does not fully capture.

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MAVERICK TRADING JOURNAL

There is an open loss to account for this morning, and the framework requires accounting for it honestly.

The GLD trade opened on June 26 at $366 with a documented stop at $358. This morning, GLD printed at $354.89, with an intraday range of $352.91 to $357.76 — the entire day's trading sitting below the stop line. The position stopped out at approximately -3.03% on the ETF frame, or roughly -$11.11 per share. That is the number. It is recorded in the trade log and it stays there.

What is worth understanding about how this unfolded: on Monday, the position was approximately 3.7% above entry, with the trade looking constructive. Four sessions of hawkish macro repricing — the hot CPI print, 40 basis points of yield surge, the dollar near a 19-month high — compressed it through target, through entry, and into the stop zone. The stop at $358 bounded the loss at -3.03%. Gold's cumulative five-session decline from Monday's $4,148 high to today sits at approximately -6.1%. A position held through the stop would have been exposed to that full second-band extension. The stop did its job.

The framework's response to a stop-out is not to immediately re-enter in the same direction to recover. That is an emotional trade, not a framework trade. The two metals present a different picture from each other today. On the gold side, the framework requires waiting for a fresh setup — specifically, a sufficient intraday trigger move with coherent sentiment confirmation and adequate distance from the recent stop level before any new entry. Today's gold rebound of +0.47% falls short of the intraday threshold that would qualify as a fresh mean-reversion signal in its own right.

On the silver side, the open SLV BUY position from March 31 at a silver-spot reference entry of $64.03 sits approximately $14.06 below entry in spot terms — approximately -21.96%, the deepest drawdown in the position's lifetime. Silver's breach of $50 during London hours on "mayhem in US bond markets" and its recovery to $49.97 near-flat is a qualified data point: physical demand is absorbing the derivative-channel repricing in meaningful volumes while the wrapper itself traverses its deepest compression. The open silver position is a live item pending a close decision. No fresh silver-side entries while it remains open.

The session divergence picture today is the first break in the week's pattern. Asia ran overnight near $3,870–$3,880 after Thursday's $3,852 low, with no fresh buying catalyst. London opened below $3,900 and saw silver breach $50. The US session counterbalanced — PPI undershoot, $3,918 intraday, settlement near $3,895. It is the first session this week where the US session moved opposite the overseas direction. That is a meaningful shift in the week's configuration. It does not, by itself, generate a new trade entry. The framework requires the intraday threshold, the sentiment alignment, and the distance from the recent stop to all be present simultaneously. Today, they are not all present simultaneously.

No new position on either metal. The framework is in a disciplined pause, awaiting a fresh setup on the other side of a stop-out.

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THE TAKEAWAY

Gold's -6.1% five-session pullback from Monday's $4,148 high to today's $3,894.80 extends beyond the brief intraday dip into the multi-session trend-move configuration that physical buyers have historically treated differently from normal volatility.

Today's session is consistent with what a DCA accumulation interval is designed to absorb. Whether that interval applies to any individual's situation depends on their own plan and timeline. The derivative-channel repricing has compressed the week's price frame into a configuration where spot-reference prices for physical gold and silver coins sit at the lower end of the recent eight-session range. Perth Mint's November gold and silver volumes confirm the physical channel is absorbing at scale. The PBoC's 24-month buying streak at record single-month pace confirms the sovereign channel is absorbing at record scale.

Silver's breach of $50 during London hours draws a line worth watching. The $50 floor is psychologically significant. A sustained break below it on hawkish follow-through in the sessions ahead would open the next structural support level. The sixth-year supply deficit projection of 46.3 million ounces and the Perth Mint's demand-and-logistics language operate on a different time horizon than the intraday chart — but they are the structural context in which that chart lives.

The gold/silver ratio at 77.9:1 remains historically elevated. When gold and silver both pull back in the same macro-driven session, the ratio tends to widen as silver underperforms — which is what happened this week, modestly. A ratio above 80 historically corresponds to silver being undervalued relative to gold on the multi-year mean. That threshold is currently close.

The framework observation on this week: a stop-out loss bounded at -3.03% is not the story. The story is that gold's structural bid — 24 months of PBOC accumulation, the third-strongest ETF inflow year on record, Perth Mint volumes at logistical-challenge scale — specifically continues to reinforce through a week when Western speculative positioning is retreating on hawkish macro repricing. Those two things coexist. Physical buyers and sovereign reserve managers are not trading the same time horizon as the futures market, and the data confirms they are not moving in the same direction as the futures market this week.

The next macro binary sits 25 days out: the December 8–9 FOMC decision. Fed New York President John Williams stated this week that "more rate hikes are likely." That path, priced at 89% probability by CME FedWatch, is the structural headwind on the near-term horizon. It is also the kind of well-priced risk that tends to produce a different market reaction than the initial repricing suggests.

Three generations of this business have watched metals get sold down on interest-rate repricing. What has followed has varied. The historical pattern is not a prediction of future results.

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DISCLOSURE

This content reflects disclosed trading activity and market analysis for educational purposes. Alex Lexington does not manage client funds or provide personalized financial advice. Past performance does not guarantee future results. Always consult a licensed financial advisor before making investment decisions.

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