# Gold Recovers to About $3,900 After Its Worst October Since 2008 as Investors Sold Bullion to Cover Tech Losses

The Federal Reserve held its benchmark rate at 3.75% to 4% last week, but two officials voted for a hike, and the 10-year Treasury yield remains near 5%.

- Published: 2026-11-02T05:15:08.429Z
- Canonical: https://polylog.news/2026-11-02/gold-recovers-to-about-3-900-after-its-worst-october-since-2
- Publisher: Polylog (Global desk)
- Section: macro
- Sources: [Investing.com Commodities](https://www.investing.com/news/commodities-news/gold-rebounds-toward-3900-as-dip-buyers-emerge-iran-risks-persist-4989797), [Globes (Hebrew)](https://www.globes.co.il/news/article.aspx?did=1001561494#utm_source=RSS)

Spot gold rose about 0.7% on Monday and [crossed $3,900 an ounce](https://phemex.com/news/article/spot-gold-breaks-through-3900-per-ounce-level-102040) as buyers returned to the market after last week's drop. On Friday the metal fell 3.7% to a one-year low, [capping a weak October for the metal](https://unn.ua/en/news/gold-rose-to-dollar3900-an-ounce-after-falling-37percent-and-experiencing-its-worst-october-in-18-years). [Investing.com](https://www.investing.com/news/commodities-news/gold-rebounds-toward-3900-as-dip-buyers-emerge-iran-risks-persist-4989797) reported that the slide came as investors sold bullion alongside other assets to cover losses from last week's technology stock sell-off. Ole Hansen, a commodities strategist at Saxo Bank, said gold needs to climb back above $4,000 to improve its short-term outlook. Silver traded near [$50 an ounce](https://www.bullionvault.com/silver-price-chart.do), according to BullionVault data.

The selling followed a sharp drop in technology stocks. On Friday the Nasdaq Composite [fell 2.9% and the S&P 500 fell 1.8%](https://finance.yahoo.com/markets/live/stock-market-today-friday-october-30-dow-sp-500-nasdaq-amazon-intel-ai-sell-off-191429143.html) after disappointing results from Amazon and Intel. Intel shares fell nearly 29% in a single day. The Nasdaq fell 5.2% in October. The Israeli business daily [Globes](https://www.globes.co.il/news/article.aspx?did=1001561494#utm_source=RSS) reported a similar pattern on the Tel Aviv and New York exchanges: both closed October lower, and money moved out of technology shares and into defensive sectors as markets began to price in the possibility of renewed war with Iran.

Monetary policy is limiting the rebound. On October 28 the Federal Reserve [held its benchmark rate at 3.75% to 4%](https://www.cnn.com/2026/10/28/business/live-news/federal-reserve-interest-rate-october) by a 10-2 vote. Federal Reserve Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of a quarter-point increase. The Fed's September increase was its [first rate hike since 2023](https://admiralmarkets.com/analytics/traders-blog/fomc-october-2026-fed-holds-rates), and data from the CME Group's FedWatch tool, which tracks traders' bets on Fed policy, showed an approximately 85% probability of another hike in December. The 10-year Treasury yield stood at about 5.05% on the day of the decision. One fund analysis put [real yields](https://www.universalassetowners.com/newsroom/fed-holds-10-2-vote-real-yields-long-horizon-owners/), Treasury yields adjusted for inflation, at 2.67%.

## What this means

Gold fell for a mechanical reason, not a monetary one. Leveraged equity holders sold their most liquid winning asset to meet margin calls, and gold's competing assets became more expensive to hold as real yields rose. The precedent is October 2008, when gold fell as funds raised cash, then rose for three years after the Fed expanded its balance sheet to stop the credit contraction. The consensus reads the one-year low as evidence that hard money has lost its case against a hawkish Fed. That view mistakes a forced sale for a change in the underlying case. The Fed is hiking with the 10-year yield near 5% and a large federal deficit. Higher rates raise the Treasury's interest bill, and that eventually limits how far the central bank can go. The desk's forward read: as long as equity volatility forces deleveraging and December hike odds stay high, gold is more likely to trade in a range below $4,000 for weeks than to recover quickly. It should regain its footing within months, once the Fed signals a pause or once credit stress forces a liquidity response. A sustained rise in real yields alongside stable credit markets would prove that read wrong.

## What to watch

- The December hike probability in fed funds futures, contracts that reflect traders' expectations for Fed policy. A drop after weak data would remove the main source of pressure on gold and silver.
- Whether gold holds above Friday's one-year low during the next equity sell-off. Holding would mean forced selling has run its course.
- Fed balance-sheet and standing repo facility usage, the tool the Fed uses to supply short-term cash to banks, if credit spreads keep widening. Rising use would show the central bank supplying liquidity even as it talks about hikes.