Gold closed October around $3,875 per ounce after its worst October since the 2008 financial crisis. This decline does not necessarily mean that the metal has lost its status as a safe haven: above all, it shows that long-term protection can suddenly decline when investors seek immediate liquidity.
In brief
- Gold lost nearly 7% in October, recording its worst October since 2008.
- The fall of the yellow metal particularly weakens investors who have purchased recently.
- ETF sales, rising interest rates and the strength of the dollar are increasing the pressure on prices.
- Despite this correction, gold retains its role as a long-term safe haven.
- A return above $4,000 could signal market stabilization.
The fall in gold especially traps recent buyers
Gold lost nearly 6.9% in October, following a 6.6% decline in September. Futures contracts began the month around $4,190, peaked near $4,259 on October 2, then finished below $3,900. More than 80% of the monthly decline was concentrated in the last eight sessions.
The session of October 30 particularly weakened the market. The metal dropped about 3.6% and broke several technical thresholds, including 3970 dollars. It also closed below its October 2025 low, located around $3,886.
Several elements explain why this correction could still weigh on prices:
- Investors have added about 150 tonnes of gold to ETFs since July;
- A significant part of these purchases is now found at a loss in value;
- Hedge funds have reduced their bullish positions for nine consecutive weeks;
- Only 10% of gold mining groups are moving above their 200-day moving average;
- The return above 4000 dollars would constitute a first signal of stabilization.
Ole Hansen, head of commodities strategy at Saxo Bank, estimated :
Short-term selling pressure tests long-term convictions.
Recent buyers now represent the main risk: a further decline could encourage them to sell in order to limit their losses.
The correction could thus be self-sustaining, even without further deterioration of fundamentals. ETF outflows would lower prices, trigger further technical selling and further increase the number of short-term investors.
A safe haven does not protect against all shocks
The simultaneous fall of gold, tech stocks and bitcoin may seem contradictory. In times of stress, the yellow metal is generally sought after for its stability and lack of credit risk. But this function does not guarantee an immediate increase during each crisis.
When margin calls increase, investors must quickly find liquidity. They then not only sell assets that they consider fragile, but also those that still have a deep market. Commentator Prem Soni summarizes this mechanism: “When you have too much debt and no cash flow, you don’t sell what you want to sell. You sell what you can sell”.
The current environment adds a second difficulty. Since the start of the Iranian conflict, Brent oil has gained about 10%, while gold has lost almost 4%, according to economist Robin Brooks. The rise in energy prices fuels inflation and increases the possibility of further rate hikes in the United States.
However, gold does not pay any interest. Sustainedly high bond yields therefore increase its opportunity cost. The strong dollar puts additional pressure on buyers using other currencies.
This situation does not, however, eliminate the strategic role of the metal. Central banks continue to buy them in order to diversify their reserves, while physical demand in India and China remains an important support. A survey from 30 analysts and traders place the median price forecast at $4,495 in 2026 and $4,650 in 2027.
Gold therefore appears less as insurance against each bearish session than as a hedge against monetary erosion, budgetary risks and currency depreciation over several years.
US data will decide next move
The first week of November could determine whether October’s fall marks a temporary capitulation or the start of a deeper correction. Investors will notably be watching the US ISM indices, the mid-term elections and the employment report expected on November 6.
Job creation and wages above forecasts would reinforce the high rate scenario. This outlook could support the dollar and keep gold under pressure. Conversely, a clear slowdown in the labor market would reduce expectations of monetary tightening and restore interest in the metal.
On a technical level, a sustainable return above $4,000 would help calm the selling pressure. Until this threshold is regained, investors will remain exposed to further sell-offs, particularly among holders of ETFs that have recently entered the market.
The October fall therefore does not spell the end of gold as a safe haven. Rather, it reminds us that asset insurance can itself become a temporary source of liquidity when all markets decline at the same time.
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