A bad week to own metal
Gold and silver had a bruising week. With the US 10-year yield up another 9 basis points to 5.28%, and the 30-year at 5.63%, the case for holding a metal that pays nothing got harder by the day: silver fell 6.6%, palladium 8.1% and gold 3.7%.
It was a broad retreat. 125 of the 194 markets Kinzan tracks finished lower, and the risk dial read 45 on Wednesday and 41 on Thursday, as investors looked for shelter. By Friday it had jumped to 67, so the week ended in a better mood than it spent most of its days in.
Dollar up, metals down, tech holds
The dollar did well out of higher yields. The dollar index rose 0.95% and the euro lost 1.1%, while the Mexican peso slid again, with the dollar gaining 3.25% against it. The odd one out was the Swiss franc, which had an extraordinary Thursday.
Every metal Kinzan tracks fell. Aluminium dropped 7.1%, a 3.2σ week for a market that rarely moves that far, and even copper, the best of the group, lost 3%.
Stocks split down the middle. Europe struggled, with Spain's IBEX 35 down 3.1% and the FTSE 100 2.2%, and the Dow gave up 1.3%. Tech held its ground: Nvidia rose 3.95% to its highest close in Kinzan's four-month window, CrowdStrike gained 7.1%, and Japan's Nikkei 225 added 2.9%. AppLovin went the other way, falling 13.7% to a four-month low.
Crypto cooled after two hot weeks, with the coins Kinzan tracks down 2.1% on average, though Aave rose 16.9% to a window high. In commodities the story was sugar, up 13.9% in the most unusual week of any market on the board, including a 7.43% jump on Thursday.
Thursday's franc shock
Thursday belonged to the Swiss franc. The euro fell 1.31% against the franc in a single session, a 6.4σ move by that pair's own standards, and the franc rose more than 1.1% against the pound and the New Zealand dollar the same day. Kinzan's market read that day put it down to haven demand. Earlier in the week, Hedera jumped 27% on Monday, and Boeing fell 6.91% the same day.
Stretched both ways
Positioning is stretched in two directions. By the CFTC's Tuesday snapshot, speculators remain heavily long Nasdaq 100 futures and copper, both close to the top of their own history, and crowded short sterling, the euro and natural gas. Silver positioning is near the bottom of its range too, which after this week is no surprise.
Central bankers take the stage
Next week is about central bankers more than data. The Bank of Japan's governor speaks on Tuesday, the minutes of the Fed's September meeting land on Wednesday, the Bank of England's governor speaks on Thursday, and Canada's jobs report closes the week on Friday.
After a week like this one, the Fed minutes matter most. They will show how the committee saw September's hike, and whether a bond market already above 5% was what it had in mind.
That's the week, dug out. The Dig is back next Sunday. Follow The Dig by RSS.
Background checked against Kitco, FXEmpire, Exchange Rates UK, Kinzan market reads. Every figure is Kinzan's own; see the methodology.
Analysis, not investment advice: nothing in The Dig is a recommendation or an offer to trade.