Gold's Worst October in 18 Years Raises Fears of Further Slump

The precious metal concluded its worst October since the 2008 crisis, settling at $3,875 per ounce on Friday. It shed 3.6% in the final trading session.

When markets reopen, short-term gold investors face the most substantial risk. Approximately 150 metric tonnes were added to gold ETFs starting in July, and Saxo Bank reports a large share of those holdings are now underwater.

Why Saxo Bank Says the Gold Selloff May Not Be Over

Ole Hansen, Saxo's commodity strategy head, said chart-oriented sellers were controlling the market. Gold dropped past a support level near $3,970 and ended the session under $3,886, undercutting its October 2025 floor.

Gold: Short-term selling pressure tests longer-term conviction

Gold suffered a major setback on Friday, breaking below key support at USD 3,970 as the selloff across global technology and AI-related stocks intensified. Rising energy prices and concerns about renewed US strikes…

— Ole S Hansen (@Ole_S_Hansen)

Hansen noted hedge funds have trimmed their long gold positions for nine consecutive weeks. If further investors capitulate, the selloff could extend, he warned.

Equity markets are compounding the strain. Hedge funds executed their most significant stock reduction since 2017, a pullback driven by AI shares.

Market observer Prem Soni characterized Friday's decline as a margin call, where brokers demand cash from investors who bought tech equities on leverage.

"When you are over leveraged and have zero cash flow, you don't sell what you want to sell. You sell what you can sell," he said.

Economist Robin Brooks noted that since the Iran conflict started, every 10% rise in Brent crude has coincided with a 4% drop in gold. Higher oil costs push inflation up, sustaining US interest rate increases. Gold, yielding no interest, loses appeal as rates rise.

Who Thinks the Worst Gold Selling Is Done

Brooks wrote his assessment after gold retreated below $4,000 on Friday, as chatter of US strikes on Iran revived.

"An imminent return to a "hot" war will weigh on gold a bit, but downside is limited…," he said.

Ronnie Stoeferle of asset manager Incrementum monitors the exit of speculators. Bullish wagers on silver have contracted to 3,321 contracts from 42,756 in July 2025, he observed.

"Ugly tape, but look under the hood."

Only 10% of gold miners are currently priced above their 200-day moving average, Stoeferle added. Analyst Rashad Hajiyev described 2026 as a consolidating phase before a possible climb to $10,000 in 2027 or 2028.

"Another major support is coming up for gold. Despite recent sell-off, gold is looking pretty good. It is forming a bullish formation. Looks like 2026 is a year of consolidation after 2024 – 2025 run. If so, 2027 – 2028 could mark another big upside in gold to $10k…" — Rashad Hajiyev (@hajiyev_rashad)

What Decides Gold's Next Move This Week

US midterm elections take place on Tuesday, and the October employment report is scheduled for Friday.

A climb back above $4,000 would start to stabilize the near-term outlook, according to Hansen.

Despite this, Hansen argued a more severe equity rout could compel the Federal Reserve to cancel the two rate increases the market still anticipates. The stock selloff currently depressing gold could, in his analysis, ultimately become its ally.