Gold’s October Slide Sees $19.5B in Speculative Selling as Oil Takes Risk Premium

December gold futures closed at $3,898.90 on October 30, falling below the $4,000 level. Goldman Sachs analyst Robert Quinn’s review of CFTC positioning data showed about $19.5 billion in cumulative net speculative selling in gold futures since September 22, including $8 billion during the October 20–27 reporting week. Of that weekly reduction, $5.2 billion came from closing existing positions and $2.8 billion from new short positions. Other Reportables and Non-Reportables accounted for about 95% of the latest selling, while total long positions in the Other category remained historically elevated. That group’s share of total gold futures open interest fell to about 18% as of October 27, from above 20% during October, but remained above the 11%–12% range seen earlier in the year. The positioning shift coincided with Brent futures hovering near $118 for January delivery as geopolitical risk premiums spread along the futures curve. In the October 20–27 week, gold fell about 1.6% while US 10-year real yields declined 11 basis points, Brent rose 4.1%, and the dollar strengthened 0.6%. From October 27 to 30, gold fell another 4.3% while Brent rose 3.7%. Gold three-month implied volatility and the standardized 25-delta put-call skew both rose, with the skew reaching about the 85th percentile of its past-year range. Goldman’s commodities desk identified $3,850 as the next potential support area after the prior $3,950 support level broke.