Key Takeaways
- Peter Schiff tied gold’s $141.60 drop on Oct. 30 to a liquidity problem that could hit markets as early as next week.
- Silver fell 6.06% to about $49.02 as the Nasdaq slid 2.9% and Intel sank nearly 29%.
- Schiff said Democrats’ Senate odds hit 71% and could climb if stocks crash on Monday, Nov. 2.
Schiff Calls the Selloff a Gift
The economist and longtime gold advocate reacted as precious metals tumbled on Oct. 30, writing:
Today’s near $150 decline in gold and over $3 drop in silver are ridiculous. Clearly this has to do with a short-term liquidity problem that will likely show up in the broader markets perhaps as soon as next week. In the meantime, it’s an unexpected gift to investors to buy more!
The downward moves were severe, as spot gold fell $141.60, or 3.52%, to about $3,879.90 an ounce in late U.S. trading, while spot silver lost $3.15, or 6.06%, to about $49.02. Silver’s sharper decline widened the gold-silver ratio.
A Brutal Day Across Markets
Schiff’s liquidity call matched the overarching market data, with Kitco saying the slide came as a technology-led equity selloff “triggered liquidation” across metals, adding that “broader financial-market liquidation was the more immediate influence” on gold.
The S&P 500 fell 1.8% to 7,580.07, its largest daily decline since June, while the Nasdaq Composite dropped 2.9%. Intel plunged nearly 29% after weak profit guidance.
Macro pressure further added to the strain as the Federal Reserve held its benchmark rate at 3.75% to 4.00% on Wednesday, with two policymakers favoring a hike. September’s core personal consumption expenditures (PCE) price index rose to 3.1%, and third-quarter gross domestic product (GDP) grew at a 3.4% annualized pace.
West Texas Intermediate crude settled at $104.12 after a tanker attack in the Strait of Hormuz, and the 10-year Treasury yield sat near 4.93%.
Crypto had its own shock the same week, with bitcoin falling to a six-week low of $76,368 after the $6.3 billion Binance hack, before steadying back again. Bitcoin.com News tracked the bounce back as BTC closed yesterday above $77K.
At press time, the world’s largest cryptocurrency is trading at $77,250.
Schiff Links Markets to Politics
Schiff tied the selloff to the wider political calendar and just days before the Nov. 3 midterm elections, he took to X and explained:
“The odds of the Democrats winning the Senate are now 71%, a new high. If the stock market crashes on Monday expect those odds to rise further. Republicans have to lie that a bad economy is good, while Democrats just have to lie that they can make it better.”
The comments seem to be in adherence to Schiff’s long-running bet on metals over risk assets, including bitcoin. In August, he dismissed a bitcoin rally as a Treasury-fueled fakeout and urged investors to “sell bitcoin, buy gold.” This time around, he has changed his tune a bit and postured the gold selloff as a warning sign rather than the opportunity being missed.
What to Watch on Monday
Schiff’s conviction has a short deadline, and if his reading is right, the liquidation that hit gold and silver on Friday should spread into equities and other risk assets when markets reopen on Nov. 2. If stocks steady up instead, the metals drop will look more like a one-day margin flush than the start of a broader crunch.
