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The Seller Had a Deadline
Last Thursday, Oct. 22, looked like gold’s kind of day. Brent crude oil had just touched a five-month high. Houthi attacks were landing inside Saudi Arabia. Then the market read Meta’s spending plan, and the Nasdaq had its worst session since June.
Frightened money did run for cover. It ran into Treasurys. The 10-year yield fell 0.17 point to 4.96%, per Treasury data, its sharpest one-day drop in more than two years. Gold got none of that money. By Friday it was trading under $4,000.
Who sold. The dealers who watch the flows tell one story. Investors sold gold and silver to cover losses and margin calls on the tech side, per APMEX’s Oct. 23 market note. A margin call is a broker’s demand for cash against borrowed money, and it does not wait. Rich Checkan of Asset Strategies International described a scramble for cash set off by falling stocks. The fund data line up. GLD, the gold fund big money trades, shed $2.3 billion in five sessions.
A portfolio short of cash sells whatever converts fastest at a fair price. In portfolios that hold it, that is often gold. First in line.
Monday ran the same chain in reverse. Chip stocks bounced, the Nasdaq rose 0.8%, and gold climbed back above $4,000.
Monday also showed where that money is headed. Meta put $35 billion of new stock up for sale to fund AI infrastructure. None of those data centers earns a dollar until it has power.
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The rate leg. The war added a second push. Oil near $110 means higher prices at the pump and in the store, and that pushes the Fed toward higher rates. Higher rates make gold, which pays nothing, more costly to hold. Futures put the odds of a December hike near 80% this morning. A six-month Treasury bill already pays about 4.3%. Gold pays nothing while it waits.
Put it in household terms. A $40,000 gold position, 5% of an $800,000 portfolio, gave back about $1,600 last week. The same $40,000 in six-month bills would collect about $860 by spring. Zero yield has a price.
The floor. On Oct. 13, with gold near $4,190, this dispatch pointed to central banks buying into weakness. The pattern is real. It did not hold the price. The World Gold Council counted 288.9 tonnes of central bank buying in the second quarter, a record for any second quarter. Gold still fell about 16% in that stretch. In September, China added 21 tonnes, its biggest month in three years. Central banks buy steadily over months. They do not step in to stop a bad week.
The reason sits in the council’s June survey of reserve managers. Of 76 central banks, 74% expect the dollar’s share of world reserves to shrink over the next five years. The shift has already started. The dollar made up 56.7% of reserves at the end of June, per the IMF, down from about 71% in 2000. That argument now has a date on the calendar, and some on Wall Street are watching it closely.
December Dollar Shock Incoming?
By Porter Stansberry, Porter & Co.
On December 14, President Trump will gather the leaders of the world’s largest economies at his private Miami resort.
And I believe what happens there could change the U.S. dollar forever – potentially triggering a historic repricing across American markets.
The pieces are already falling into place:
A flurry of executive orders… billion-dollar government stakes in obscure mining companies… a landmark pact with 13 nations… and a special agreement signed by six billionaire tech moguls.
At Trump’s December summit, those pieces could finally be assembled in public for the first time – and a new kind of dollar presented to the world as a done deal.
Whether you’re a Republican or Democrat – whether you support this monetary shift or oppose it – you could soon be using Trump’s New Dollar.
That’s why I’ve produced this critical new documentary revealing:
Why I believe Trump is desperately trying to reset America’s money…
Why this has nothing to do with Bitcoin or gold – but is tied to the most valuable resource of the 21st century…
And three moves I believe you can make today to prepare – including the name and ticker of the investment I believe could benefit as this shift unfolds.
The last time America reset its money, it reportedly created – on average – more than 1,000 new millionaires every day for five decades.
But that was only one side of the story.
Millions of workers and savers were quietly left behind as their wages stalled, their savings were hollowed out and the American Dream slipped beyond their reach.
Now, I believe that same dividing line could be drawn again.
Here’s how I think you can prepare.
Whatever December brings for the dollar, gold’s test this week is closer to home.
The new link. Here is the part worth carrying through the rest of the fall. Gold now moves with the AI trade, because the same portfolios own both. A tech giant’s spending plan knocks the Nasdaq. Margin desks call. Gold is the first holding many of those portfolios can sell cleanly.
In thirty years of advising individual investors, I watched clients raise cash in a hurry the same way every time. They sold whatever buyers would still pay a fair price for.
Wednesday afternoon. That puts gold’s biggest test of the week in an odd place. The Fed announces its decision at 2 p.m. Eastern on Wednesday, and Microsoft and Alphabet report the same day. Amazon follows Thursday, after that morning’s inflation and growth reports.
A calm Fed and two steady spending reports let the forced sellers stand down. A tougher-than-expected Fed plus another Meta-style shock sends them back to sell more gold.
The easiest asset to sell is the first one sold. Gold paid that bill last week, and Wednesday’s tech reports decide whether it pays again.
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