Why gold and silver are falling despite lower yields: who has been selling both metals for eight weeks?

Executive summary

Silver lost 13.66% in October through the close on 29 October, ending at 52.00 dollars per ounce, its lowest close in 2026. Gold fell 3.29% to 4,020.57 dollars. In trading on 30 October, silver fell to 49.98 dollars as of 12:00 GMT, below 50 dollars for the first time since its last daily close below that level on 21 November 2025. Gold fell to 3,921.49 dollars as of 14:00 GMT, below its lowest close in 2026.

The explanation circulating in headlines is that markets are betting on a US rate increase in December. But this explanation does not hold up against data for the same month. The real yield on ten-year Treasuries—the yield after deducting expected inflation—fell from 2.93% to 2.63%, a decline of 30 basis points; a basis point is one hundredth of a percentage point. The two-year Treasury yield fell 27 basis points. The probability of a December rate increase also fell in the prediction market, where participants trade contracts on the outcomes of future events, from 84% after the Federal Reserve’s (Federal Reserve) decision to around 73.5%. In the same month, the price of the TLT long-term Treasury fund rose 4.77%. Nor did the dollar move enough to explain the decline: it rose 1.33% against the euro in October, then fell against it over the last two days.

What is consistent with the data is money flowing out of both metals. Managed money comprises hedge funds and portfolio managers who speculate in the futures market (Futures), using contracts to buy or sell an asset at a later date. This group reduced its net long position in gold—long contracts minus short contracts—for eight consecutive weeks, from 144,747 contracts to 104,206 contracts. Meanwhile, 14.62 tonnes flowed out of GLD, the world’s largest gold fund, since the end of September. In silver, speculators were left with only a small long position: just 3,505 net contracts, a reading below 96.8% of readings over the past three years. The explanation for the full year differs from that for the month: from the January peak to early October, the real yield rose more than one percentage point, consistent with gold’s 25.8% decline from its peak.