The Troy

Gold Separates From the Rest of the Complex

Shanghai gold rose 1.07% in the first full trading week after the National Day holiday while silver fell 6.64%, platinum 3.61% and palladium 3.11% on their respective Chinese market measures from the same 8 October base. The divergence is only visible when every metal is measured against a common post-holiday reference. The cumulative platinum and palladium figures that have drawn most attention — 6.85% and 9.84% — run from the 30 September pre-holiday close and largely consist of the reopening adjustments we reported a week ago. On comparable terms silver was the weakest of the four, falling 1.84 times as far as platinum and 2.14 times as far as palladium.

Positioning moved the same way everywhere but by different mechanics, and the mechanics are what matter. Gold and silver saw longs liquidated while shorts were added, the combination that represents a change of stance rather than profit-taking. Platinum’s decline came almost entirely from longs leaving, making it the only market where both gross books contracted. Palladium was the only one where both expanded, with shorts added roughly 2.6 times faster than longs, taking Managed Money gross shorts to 69.1% of total futures open interest — a measure against all reported open interest, not the share of the market controlled by short sellers. Silver is this week’s standalone, and the LBMA’s Q3 report required us to revise it: London silver vault holdings rose 3.22% during the quarter to 28,985 tonnes, through a period in which the price fell. The annual deficit forecast remains, but the evidence no longer supports the continuing decline in aggregate London holdings described in our August analysis.

Silver analysis — 2026-10-19

London vault holdings rose 3.22% in the third quarter as the price fell, requiring a revision to the inventory argument in our August piece. What survives of the structural case, and what does not.

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CFTC Precious Metals Positioning Intelligence — Short Selling Spreads to Silver as Palladium Shorts Build

Net positioning fell in all four metals to 13 October, by four different mechanisms. Palladium’s gross shorts reached 69.1% of total futures open interest.

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China Precious Metals Intelligence — Gold Decouples as Silver Leads the Selling

Shanghai gold rose 1.07% while silver fell 6.64%. Record Chinese gold ETF holdings, the largest PBoC monthly purchase since 2023, and wholesale demand still well below normal.

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CFTC Managed Money Positioning

Positions as at 13 October 2026, published 16 October. Futures only, in contracts.

Palladium’s gross shorts of 16,003 contracts represent 69.1% of total futures open interest, up from 65.9%. Shares are Managed Money positions measured against all reported open interest, which includes every other category of participant. Open interest rose in all four markets, a change from the previous report. Spreading positions are excluded from the net calculation. Full gross positioning is in this week’s CFTC note.

China Physical and Exchange Prices

SGE gold is 16 October; SMM and GFEX observations are 15 October.

These are an SGE contract, an SMM physical assessment and two GFEX futures observations, so they describe each market on its own terms rather than a standardised cross-metal comparison. GFEX figures are morning-session observations, not settlements. The 8 October SMM silver base is a Bloodstone calculation set out in the 12 October edition. Prices are in reported yuan units with no currency conversion applied.

Warrant inventories were not updated during the closure, so the SHFE comparison runs from 30 September. Warrant categories are not additive to the social inventory total.

London Vault Holdings

London silver vault holdings rose 3.22% during the third quarter to 28,985 tonnes, from 28,082 tonnes at end-June. Gold holdings rose 3.78% to 9,821 tonnes. Source: LBMA Precious Metals Market Report Q3 2026, published 14 October. Vault totals include metal held on behalf of exchange-traded funds and other vehicles, and are not a measure of freely available supply.

01 — London’s Silver Rebuild

Four consecutive months of increases, taking holdings to 28,985 tonnes at end-September. This is the evidence that required revising our August position, and the next monthly vault release tests whether it holds. The aggregate includes ETF and ETC metal, so a continuation would still leave the free-float question open.

02 — Palladium’s Short Concentration

Managed Money gross shorts of 16,003 contracts against total futures open interest of 23,173, in the smallest of the four markets. The net short has more than doubled since 8 September, and palladium has set two contract lows since listing in eight days. A large short is not evidence that covering is imminent.

03 — Gold’s Separation From the Complex

Shanghai gold rose while the other three fell, against a backdrop of record Chinese ETF holdings at 304 tonnes and the largest PBoC monthly purchase since October 2023. Whether the separation persists is the question for the next edition; September flow data cannot establish that they caused an October price divergence.

04 — Chinese Wholesale Gold Demand

September SGE withdrawals rose 48% month on month to 92 tonnes but remained 22% below September 2025, with third-quarter volumes 44% below the ten-year quarterly average. Financial demand and jewellery-led demand have been telling different stories for long enough that the division now looks structural.

05 — Silver’s Inventory Draw

Twenty-five tonnes is measurable but small, at roughly 0.6% of the Chinese social total, and it followed a week of two tonnes. Further inventory withdrawals, accompanied by stronger physical transactions, would provide better evidence of sustained demand.

06 — Copper Substitution in Photovoltaics

The LBMA’s Q3 report names it as a market development, citing manufacturer announcements rather than a quantified reduction in global silver consumption. What is missing is any measure of how much demand it displaces and whether the Silver Institute’s projection already captures it.

The deficit forecast is still there. The depletion isn’t.

Gold strengthened in Shanghai while silver and the platinum-group metals declined, although Managed Money net positioning deteriorated across all four markets. The underlying changes differed: gold and silver attracted additional shorts, platinum saw long liquidation, and palladium’s gross short exposure continued to expand.

Silver presents the more important analytical development. London vault holdings increased during the third quarter, requiring a revision to the depletion argument in our August research, even as the annual deficit forecast remains. Chinese inventory withdrawals are modest and physical transactions subdued. The next question is whether these markets begin to show sustained tightening, rather than whether the projected deficit alone justifies a higher price.

Data: CFTC Disaggregated Commitments of Traders, positions 13 October 2026, published 16 October; Shanghai Gold Exchange daily report of 16 October 2026 and Shanghai Metals Market releases of 15 October 2026; LBMA Precious Metals Market Report Q3 2026, published 14 October; World Gold Council China Gold Market Update, 15 October 2026.

The Troy is published every Monday by Bloodstone Research, covering gold, silver, platinum and palladium.

This document is published by Bloodstone Research for informational and institutional research purposes only. It does not constitute investment advice, an investment recommendation, an offer or solicitation to buy or sell any financial instrument, commodity or security, or a forecast of future performance. Market conditions and data may change without notice. Readers should conduct their own analysis and, where appropriate, seek independent professional advice before making investment decisions.

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