Happy Sunday, GoldBuzzers!

It was another rough week for anyone holding gold or silver, and I won’t pretend otherwise. This morning’s Deep Dive starts with the price target Andrew Sleigh at Sprott Money had been waiting on since July.

Then we’ll look back through 50 years of gold prices to see what happened after weeks like this one. The record is a lot more encouraging than this week’s headlines.

Ok. Let’s get into it. ⬇️

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Gold finished below $4,000 an ounce on Friday for the first time in three months, down almost four percent on the week, and silver fared worse, sliding under $54 to levels last seen in November 2025.

Oil did the immediate damage. Brent crude settled at $116.72, its highest close in nearly six months, after Houthi attacks on Saudi energy infrastructure stoked fears of supply disruptions - and pricier oil feeds straight into inflation.

With this month’s consumer and producer price data already running hotter than expected, markets now assume the Fed has more rate rises ahead, and higher rates raise the cost of holding metals that pay no yield. The Fed meets Tuesday and Wednesday and is almost certain to hold - traders give a hike barely a one-in-ten chance - but odds of a December increase sit near 75 percent on CME’s FedWatch tool.

Thursday brings September PCE inflation, the Fed’s preferred gauge, so by this time next week we’ll know a lot more about where rates, and the metals, go from here.

The $54 that came a day late

In Thursday’s GoldBuzz, I caught up with Andrew Sleigh, senior broker at Sprott Money, who spent the summer waiting for silver to drop to $54. It never did, so he bought around $58 instead. Thursday’s headline was “My bullion dealer waited for $54 silver. It never came, so he bought anyway.”

On Friday, silver finally closed at $53.88.

Markets have a dry sense of humor, but Andrew wasn’t caught out. In the same conversation he said he was bearish “for about two more weeks,” and called the coming weeks “a very good accumulation period.” A day later, the price he and his clients had been waiting on since July finally showed up.

A week to forget

Gold closed Friday under $3,995, down about four percent on the week. That’s its worst week since early June, and its first close below $4,000 since mid-July. Silver fell more than five percent to its lowest close of the year.

The trigger was oil. Fresh tensions in the Middle East pushed Brent crude, the global oil benchmark, close to $112 a barrel. Markets worried that pricier fuel would keep inflation high and push the Federal Reserve toward raising interest rates.

Gold doesn’t pay interest, so talk of higher rates tends to weigh on it. At the same time, a slide in tech stocks left some investors scrambling for cash, and gold was one of the first things they sold.

Why gold gets sold first

It sounds backwards, but the pattern goes back decades. When stocks fall hard, investors who borrowed to buy shares get calls from their brokers asking for more money. They have to raise it fast, and gold is easy to sell at a fair price at any hour. So it’s often the first thing out the door.

On Thursday I mentioned analyst Tavi Costa’s point that the only other time gold fell this far from a peak was at the bottom of 2008. So it’s worth looking at what happened then.

Between March and November 2008, gold fell 29 percent, from about $1,002 an ounce to $710. Over the next three years it climbed 167 percent, peaking at $1,897 in August 2011.

It happened again in March 2020. When the pandemic hit, gold dropped 12 percent in under two weeks as investors sold everything they could for cash. By early August it had set a new record of $2,069.

In both cases the selling came from people who needed money quickly. Once that pressure eased, gold went on to new highs.

The big one: the 1970s

In December 1974, gold hit $193 an ounce after a huge run. Over the next 20 months it fell 46 percent, bottoming at $104 in August 1976. Plenty of people decided the gold story was over.

Anyone who sold missed what came next. By January 1980 gold had reached $835, eight times its 1976 low. That painful slump turned out to be a pause on the way to the decade’s biggest gains.

What happened after weeks like this one

I went back through the 2001-2011 gold bull market and pulled out every week when gold fell by 3.5 percent or more. There were 41 of them. A year later, gold was higher in 39 of those cases, and the typical gain over that year was 18 percent.

That isn’t a promise. Gold’s still about 26 percent below January’s record, and some of this year’s sharp down weeks were followed by more selling before things improved. But this year has also shown how fast gold can turn. After closing at $3,976 on July 16, it rallied 17 percent to $4,658 in under six weeks.

What Andrew’s number means now

Back in July, Andrew said two closes below $54 would make a drop to around $48-50 likely. Friday was the first. A move like that would take silver back to its old highs from 1980 and 2011, a ceiling that held it back for 45 years. Analysts often watch for an old ceiling like that to become a floor.

He also said on Thursday that gold could slip as far as $3,500 to $3,700. Friday’s low was $3,976, so there’s no sign of that yet.

He isn’t treating either as a reason to panic. His wealthier clients are buying in monthly installments rather than trying to guess the bottom. As he put it back in March, “You can never get the bottom, but you can nibble on the way down and nibble on the way back up.”

What to watch this week

The Fed announces its decision on Wednesday. Most economists expect it to hold rates steady this time, with the bigger question being what it signals about December. On Thursday, Andrew pointed out that the last Fed meeting knocked gold for an afternoon before it bounced back. Oil is the other one to watch. If tensions ease and crude backs off, the main reason for this week’s selling goes with it.

The bigger picture

Two years ago gold was $2,721 an ounce. Today, after one of its worst weeks of the year, it’s $3,995, still up 47 percent. Drops like this one are part of the consolidation phase that long bull markets go through, and history shows they’ve usually set up the next move higher rather than ended the run.

The 1970s bull had its 46 percent fall and kept going, and the 2000s bull came through 2008 to reach new records. The reasons people own gold, from record government debt to the steady loss of buying power in paper money, haven’t changed this week. If anything, a week of oil-driven inflation fears is a fresh reminder of why they bought it.

That’s all for this Sunday, folks. I’ll see you on Tuesday.

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Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com