Money Fled Stocks For Treasuries And Left Gold Behind

On Thursday the ten-year Treasury yield fell 19.3 basis points to 4.953 percent, its biggest one-day drop since 10 March 2023, Reuters reported — and in the same session Brent settled up $4.35 at $113.17 and the Nasdaq Composite lost 2.6 percent, Reuters reported, while Comex gold settled at $4,042.80, down 2.12 percent, Dow Jones reported. At 6 a.m. Eastern this morning Brent was up about 1.1 percent at near $114, Yahoo Finance reported.

The money left stocks first. The S&P 500 closed down 1.2 percent at 7,663.43 and the Philadelphia semiconductor index fell 6.7 percent, Reuters reported, after Meta lost 7 percent on its earnings report and a plan to issue non-voting stock revived worries about the cost of building out AI. The Dow Jones Industrial Average closed up 11.89 points at 52,867.98.

It went into Treasuries. On 7 October the ten-year had touched 5.3645 percent, its highest since April 2002, Reuters reported; yesterday’s letter had it near 5.13 on Wednesday, and Thursday it closed under 5. The size of the drop depends on the vendor — 19.3 basis points on Reuters, 18.5 on investingLive, about 17 on Cappnotes — and this letter uses Reuters.

Paris went the other way. The French ten-year yield rose 6.5 basis points to 5.06 percent, Reuters reported, above the Treasury yield for the first time since 2013. Earlier in the session Dow Jones, citing LSEG data, had it at 5.142 percent, the highest since 2002, with the spread over the German ten-year Bund at 173 basis points, the widest since 2011. Dow Jones tied it to doubts that France’s fractured parliament will pass a budget to cut its deficit, after violent protests.

That is the move on the screen. The explanation offered for the metal does not fit it.

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Comex gold settled at $4,042.80 on Thursday, down 2.12 percent, Dow Jones reported through Morningstar; Cappnotes put December gold at about $4,038, down about 2.7 percent. Yesterday’s letter printed Wednesday’s close as $4,150.00 on Cappnotes, while the Dow Jones percentage implies about $4,130. The two bases differ, and this letter cannot reconcile them. The Rio Times reported the gold fund GLD down 2.63 percent at $369.00 and the silver fund SLV down 5.59 percent at $49.34.

The reasons given for the sale all run through oil. The Rio Times tied it to the crude rally, higher inflation worries, expectations of rates held higher for longer, and weekly jobless claims of 194,000 against 200,000 expected. USAGOLD, a precious-metals dealer, said it was paper and futures selling rather than physical demand, called it a fifth straight lower session, and said central banks remain net buyers; it gave no purchase figures.

And in the same session the ten-year yield fell nearly 20 basis points.

Oil had its own day. Brent settled at $113.17 and WTI at $99.47, up $2.32, Reuters reported, with Houthi attacks in Saudi Arabia cited as the cause. The navy of Iran’s IRGC claimed on Thursday to have hit seven more tankers; Washington dismissed the claim, Al Jazeera reported. Overnight, Yahoo Finance reported that oil rose on reports that the US and Israel may strike Iran again after the November midterm elections, and that Tehran has vowed to retaliate. investingLive called these reported risks, not confirmation. This letter attributes no attack to any party beyond what that party itself claims.

Back in Europe, the iTraxx Europe Crossover index of corporate credit risk reached 329 basis points, its highest in nearly seven months, Dow Jones reported. Mitch Reznick of Federated Hermes said the bond volatility is no longer just a rates story and is driving a decompression in corporate credit spreads.

On one side, Paris paying more than Washington to borrow for ten years. On the other, a metal sold on the day safety was in demand.

Thursday’s settlements, Reuters reported: December Brent at $113.17 and WTI at $99.47. Both tie to the Wednesday settlements of $108.82 and $97.15 that yesterday’s letter printed, so nothing in that letter needs correcting on oil.

The Nasdaq Composite closed at 26,008.86, down 2.6 percent, its biggest daily drop since early June, Reuters reported. Premarket this morning, Yahoo Finance reported at 6 a.m. Eastern, S&P 500 futures were down about 0.2 percent, Dow futures down about 0.6 percent and Nasdaq 100 futures nearly flat. Futures do not say how the session will close.

The Fed decides on Wednesday 28 October. Futures priced a 22 percent chance of no further hike this year, investingLive reported, and Polymarket gave 74.5 percent to another hike in 2026, the Rio Times reported. Both are market-implied odds, not Fed signals.

AAA put regular gasoline at $4.2701 on 22 October, against $4.3344 a week ago and $3.0656 a year ago. Diesel stood at $6.3090, below the AAA record of $6.5276 set on 22 September.

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