Gold fell 3.5% in one day. I broke down why it was sold on a day when both the dollar and interest rates fell, looking at it by day and by year.
On October 30, 2026, gold fell significantly. The gold ETF (GLD) dropped 3.5% from $368.57 to $355.78. Silver (SLV) fell 5.7%, and the gold mining ETF (GDX) fell 5.2%. On the same day, the Nasdaq 100 (QQQ) also fell 3.5%.
What is strange is that on this day, the dollar fell and U.S. long-term interest rates also declined. Both are movements that would normally push gold higher. I was a bit curious, so I compared this to how gold usually moves.
To give the conclusion first, the movements in stocks, the dollar, and interest rates could only explain about a quarter of gold’s decline on October 30. I interpret the rest as “liquidation” selling that occurred at the same time as the stock market plunge. On the other hand, the fact that gold has fallen nearly 30% from its January high is a matter of interest rates heading toward hikes, which is a different reason from the one-day decline. Whether gold was able to rebound strongly after past liquidation selling also depended on the direction of these interest rates.
1. Calculated at -0.9%, actual was -3.5%
Based on price movements from April to October 28, I calculated “how gold has moved on average when the Nasdaq 100, the dollar index, and the U.S. 10-year interest rate moved” (author’s estimate). Applying the movements of October 30 (Nasdaq 100 -3.5%, dollar index -0.16%, 10-year rate -0.06 points), the results are as follows.
-
Gold (GLD): Calculated -0.9%, actual -3.5%
-
Silver (SLV): Calculated -2.9%, actual -5.7%
-
Gold mining stocks (GDX): Calculated -1.8%, actual -5.2%
-
Newmont (NEM): Calculated -1.5%, actual -4.6%
The difference of about 2.6 points for gold is more than double the usual daily fluctuation (about 1.1 points). Even when changing the calculation period to start from January, the calculated decline was -0.8%, which was almost unchanged.
2. It fell at the same time as stocks
Looking at gold futures hour by hour, although they had been falling little by little since the previous day, the major decline occurred between 8:00 AM and 11:00 AM Eastern Time. From $3,976 at 7:00 to $3,908 at 11:00. This overlaps with the time the New York stock market opened and stocks were sold off.
Reports suggest that triggered by the Nasdaq plunge, gold and silver, which are easy to sell, were sold off to cover losses or provide collateral. The fact that silver and gold mining stocks, which have higher volatility, fell more significantly also fits this view.
3. After the past 5 instances of liquidation selling
While gold is prone to being sold off for liquidation, it tends to have a strong rebound after the selling runs its course. Having that impression, I lined up past situations where gold was also sold off due to a stock market plunge.
In 3 out of 5 cases, it was as I expected. During the Lehman crisis (2008), COVID (2020), and the tariff shock (2025), gold rebounded by about 30% in 6 months from its low, and recovered its pre-selloff high in 3 to 74 days. In all 5 cases, the bottom for gold came before the bottom for stocks, forming a pattern of “sold first, rebound first.”
On the other hand, in the remaining 2 cases, the rebound was sluggish, and it took time to recover the highs.
-
2011 (U.S. debt downgrade): It was right after gold had surged +54% in one year. Even after the selling ran its course, the rebound was weak, and it took about 9 years until 2020 to recover the high.
-
2022 (Interest rate hikes): It was not a single plunge, but rather a -20% decline over half a year as real interest rates (interest rates minus inflation) rose. It began to rebound when the rise in real interest rates stopped.
The 3 cases that rebounded strongly occurred when financial easing was implemented after the shock, or when real interest rates were flat. The 2 cases where it was sluggish were either right after a surge or during a rise in real interest rates.
This time, after a sharp rise of +92% in the year leading up to the high, the U.S. 10-year real interest rate has also risen from 1.94% in January to 2.63% on October 29. Applying past classification methods, it is close to the conditions of the two instances where the recovery was sluggish.
Also, the figures in the ‘from the low’ column in the table are only possible to state because we know in hindsight where the low was. Looking from the day of the sharp one-day drop, the price fell a further -16% in 2008 and a further -15% in 2022 before hitting bottom. Looking only at the days when both the Nasdaq 100 and gold fell sharply, in the 10 instances since 2007 (excluding this time), gold was up 20 trading days later in 5 instances and down in 5 instances.
4. Looking at it over a year, the opponent is interest rates
Apart from the one-day drop, gold has fallen significantly over this past year. Gold futures went from $5,318 on January 29 to $3,899 on October 30. That is a -27% drop from the high.
During this period, U.S. interest rates rose.
-
Policy rate: The Fed raised rates on September 16 and held them steady on October 28. However, two members dissented, arguing for further rate hikes.
-
Economy and prices: GDP for the July-September quarter was +3.4% at an annual rate, and the September Personal Consumption Expenditures (PCE) price index was +3.6% year-on-year.
-
Long-term interest rates: The U.S. 10-year yield went from 4.16% at the start of the year to 4.93% on October 30.
Gold does not pay interest even if you hold it. As interest rates rise, it becomes less attractive compared to bonds or deposits that pay interest. I think it is natural to interpret the one-year decline through this ‘comparison with interest rates.’ However, gold surged in January and fell -10% in a single day on January 30. The entire one-year decline cannot be explained by interest rates alone.
On the other hand, people holding gold ETFs have not sold much. The amount of gold held by GLD decreased by 4%, from 1,087 tons at the end of January to 1,041 tons on October 29. Compared to the price dropping by about a quarter, the amount let go can be read as small.
5. Things to check next
-
December FOMC (December 8-9): If rate hikes continue, it will remain a headwind for gold. If they hold off, the reason for the one-year decline will weaken.
-
Real interest rate peaking: Even in past phases where the recovery was sluggish, gold began to recover once the rise in real interest rates stopped. I will watch to see if the U.S. 10-year real interest rate begins to fall from the 2.6% level.
-
Correlation between stocks and gold: If gold does not recover even after stocks settle down, I will revise my assessment to conclude that it is not just liquidation selling, but continued selling of gold itself.
-
GLD holdings: If the decrease is such that it falls significantly below 1,000 tons, I will see it as a signal that holders have begun to let go.
The one-day sharp drop was a day where the color of selling caught up in the stock market crash was stronger than the selling of gold itself. However, beneath that is a decline that has continued for a year amidst rising interest rates. When viewed separately, the perspective on the same ‘gold decline’ changes. After past liquidation sell-offs, gold has recovered strongly in many phases. Whether it can continue that this time depends on the direction of interest rates.
MiFsee summarizes how to invest in gold (ETFs/gold mining stocks) and the reasons for holding gold for the long term.
▶ Read articles on gold investment and related stocks | MiFsee
Note: This note is intended to share research findings and does not recommend any specific stocks or the buying/selling of gold. Prices are the closing prices of each ETF/stock, and gold futures are closing prices and hourly values. The ‘calculated decline’ was estimated by the author based on daily price movements from April 1, 2026, to October 28, and does not indicate future movements. Policy rates are based on Fed statements, GDP and PCE are published values from the U.S. Department of Commerce, and GLD gold holdings are based on SPDR published data. The ‘past 5 liquidation sell-offs’ measured gold futures from high to low during stock market crash phases, and the lows and highs are values viewed in hindsight. Real interest rates are based on the yield of U.S. 10-year Treasury Inflation-Protected Securities (FRED). Perspectives on liquidation selling are based on media reports.