Gold falls below $4,000 after massive liquidation of precious metals

Gold falls below $4,000 as markets suffer a wave of selling that affects several precious metals. On Thursday, losses accelerated in a context marked by rising oil prices and inflation fears. Even with bond yields declining, this safe haven did not attract investors. This drop raises questions about the strength of the upward trend and occurs as Peter Brandt directly challenges Peter Schiff.

Gold falls below $4,000 after two difficult sessions

Friday morning, in Asia, gold traded around 3,998.72 dollars, a daily decline of 0.63%. The precious metal also touched a low near $3,986 during the session. It is now about 22% below its record of $5,110.50 reached on January 26. This correction marks a significant change after the highs recorded at the beginning of the year.

The decline accelerated on Thursday, when sellers also attacked silver and several other commodities. Silver lost 5.8%, while the yellow metal fell 2.8%. This session erased about $810 billion in market value for gold and over $190 billion for silver. Platinum gave up 4%, palladium 3.7%, and copper 2.8%.

Friday morning, estimates indicated over $1,300 billion in cumulative losses over two days for the metals concerned. Silver notably reached its lowest level in eleven months. This development shows that selling goes far beyond a single market segment. It also raises questions about the mechanisms that triggered this liquidation wave.

Oil and rates fuel pressure on gold

Rising oil prices are one of the main sources of tension. Fears of a conflict with Iran pushed Brent to $112.92, after an increase of about 3.8%. This rise rekindles concerns about inflation and complicates monetary outlooks. Investors are therefore reassessing the risks related to a sustained rise in prices.

In this context, futures market operators have increased their expectations for US rate hikes. CME FedWatch data indicated about a 90% probability of a rate increase by the Federal Reserve in December. This outlook weighs on gold, which generates no regular income. When rates go up, income-generating investments can become more attractive for some investors.

At the same time, AI-related stocks fell sharply. The Nasdaq recorded its worst session since June, while the S&P 500 had its most disastrous day since July. Usually, stock market tensions can favor safe haven purchases. Yet this time, investors turned more towards Treasury bonds.

The yield on 10-year US Treasury bonds dropped about 17 basis points to 4.96%. Inflation-adjusted yields also declined, without preventing the precious metal’s fall. Some analysts mention forced selling to explain this unusual reaction. However, they note that the real extent of liquidations remains to be confirmed.

Peter Brandt challenges Peter Schiff on gold’s fall

The correction also sparked exchanges between two well-known figures in financial markets. Trader Peter Brandt shared a chart of gold futures contracts while specifying that he was not making any forecast. However, he warned that a continued decline could erase all gains recorded in 2025. His comment was directed straight at Peter Schiff, a long-time defender of the precious metal.

Brandt then challenged Schiff, noting that such a scenario would not match his expectations. When asked by a follower about a possible timeframe, the trader mentioned three to five years. In another response, he estimated that the upward trend of this commodity was very likely to fade. These remarks remain personal opinions and do not constitute a certainty about future price developments.

A few days earlier, however, Schiff presented a price of $4,145 as a good buying opportunity. Investors who followed this recommendation have since seen a drop of about 3.5%. This discrepancy illustrates the risks related to decisions based on market expectations. It also shows how a rapid correction can undermine a short-term strategy.

Bitcoin and technical levels: the market’s next markers

Bitcoin did not provide more protection to investors against Thursday’s turbulence. Its price fell below $81,000, despite over one billion dollars in inflows into spot ETFs. At the time data was communicated, the cryptocurrency was down 4.1% for the day, against 2.3% for gold. Both assets therefore faced selling pressure, despite their operational differences.

Over the year, performances remain relatively close. The precious metal ended 2025 around $4,354, while Bitcoin closed that period near $87,498. At about $4,000, the former shows an annual decline close to 8% in 2026. At $81,000, bitcoin retreats about 7.4%, bringing the results of the two assets closer together.

Technical analysts are now watching several thresholds before the Fed meeting scheduled for October 27-28. A resistance at $4,198.93 is the first level to reclaim to consider the end of the selling wave. Below $4,000, a support zone between $3,924 and $3,942 draws their attention. If this support breaks, the next bearish target is around $3,754.

Upcoming data on US inflation and monetary decisions could steer future movements. A rebound above resistance would signal a possible easing of selling pressure, without guaranteeing a lasting reversal. Conversely, breaking support would expose prices to further decline. Markets will therefore have to confirm their direction through upcoming technical levels, while investors will watch the Federal Reserve’s choices.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.