Gold/Silver Weekly Update 24/10/26

 Until this whole mess is sorted out: Fed FOMC 28 Oct, US mid-term elections 3 Nov, US-Iran Hormuz, Houthis-Saudi Arabia; the level of uncertainty is too high for any meaningful analysis amid the daily volatility. But one positive signal for gold/silver is that even though inflation is raging, there are signs of investors expecting it to be quickly followed by a recession- which is good for gold/and silver as the Fed will do all it can to avoid or mitigate a recession by its usual measures of printing money and maybe bailing out the too-big-to-fail entities like the big banks- and this category of entities now include the debt-ridden the AI, semiconductor and data centre companies.  

 Gold/Silver prices are not correlated with nominal interest rates but real interest rates which is nominal rates minus inflation, a.k.a. real yields. In the chart below, the left 2 panels show the 10-year real yields and the right 2 panels show the 5-year real yield. Real yields are negative when the plotted areas turn green. Even though they currently look quite far from that, you can see red area is reducing. 

The 8-week rate-of-change measures momentum, not level. Even though real yields are still elevated in absolute terms (2.64% and 2.33% are historically high), the rate of increase is slowing dramatically. At this pace of deceleration, the rate of change could cross zero — the definitive tailwind signal — within 4 to 6 weeks if the trend holds.

Crucially, the 5Y is leading the 10Y lower, which is the classic Fed pivot early-warning pattern we have been watching for. The 5Y yield dropped 25 basis points in a single week (2.58% → 2.33%), a substantial move.