The Troy

Gold’s Separation Lasted One Week

Shanghai gold fell 4.17% in the week to 23 October, closing lower in all five sessions and surrendering the previous week’s 1.07% gain four times over. That gain had made gold the only one of the four metals to advance; the following week, all four declined, with silver and palladium recording larger percentage falls than gold on their respective exchange comparisons. Silver fell again, with the SGE’s Ag(T+D) contract down 7.11% and the spot Ag99.99 contract 6.45%, both also lower in every session — a continuation rather than a reversal, since silver was the weakest metal last week too. Palladium declined 5.20% on the Guangzhou exchange to a third contract low since listing, and platinum fell 0.50% over a week whose range ran from ¥406.15 to ¥386.10. One editorial note: we have changed silver’s price series this week, because SMM published a trading range rather than a single closing assessment for 23 October. The SGE contracts above are observed on the same basis as the gold series, and last week’s 6.64% decline in SMM #1 silver is not continuous with them.

Managed Money net positioning fell in all four metals for a second consecutive report, again by different mechanics. Gold’s reduction remained long liquidation, but short covering replaced the short accumulation of the previous two weeks, and its five-week decline in net length has now coincided with a reversal in Shanghai prices. Silver moved the other way and more sharply: gross longs rose 378 contracts while gross shorts rose 2,492, an increase of 24.5% in the short book in one reporting period and roughly twice the previous week’s addition. Platinum’s gross longs were static at plus three contracts, so its entire reduction came from 457 new shorts. Palladium saw both books expand again, taking Managed Money gross shorts to 70.0% of total futures open interest — a measure against all reported open interest, not the share of the market held by short sellers. Palladium is this week’s standalone, examining why its unusually concentrated speculative short position coexists with a forecast market surplus despite declining primary supply.

Palladium analysis — 2026-10-26

The market turns to its first surplus since 2012 — not because supply is rising, but because demand is falling more than three times as fast. Why the shorts are not sitting on abundant metal.

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CFTC Precious Metals Positioning Intelligence — Silver Shorts Surge as Palladium Bearish Exposure Deepens

Net positioning fell in all four metals to 20 October. Silver’s short additions nearly doubled and palladium’s gross shorts reached 70.0% of futures open interest.

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China Precious Metals Intelligence — Gold Reverses as Silver Inventories Continue to Fall

Shanghai gold fell 4.17% across five consecutive lower closes while Chinese silver inventories drew another 75 tonnes, three times the previous week’s reduction.

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CFTC Managed Money Positioning

Positions as at 20 October 2026, published 23 October. Futures only, in contracts.

Palladium’s gross shorts of 17,434 contracts represent 70.0% of total futures open interest, up from 69.1%. Shares are Managed Money positions measured against all reported open interest, which includes every other category of participant; every contract has a long side and a short side, so the figure does not describe the proportion of the market positioned bearishly. Open interest rose in all four markets for a second consecutive report, with palladium recording the largest proportional increase at approximately 7.5% and gold the largest in contracts at 5,934. Spreading positions are excluded from the net calculation.

China and London Exchange Prices

SGE observations are 23 October; GFEX observations are 22 October; the LBMA benchmark is the 23 October AM auction.

SGE comparisons run from 16 October and GFEX comparisons from 15 October, so the platinum-group figures end one session earlier and exclude Friday. These are exchange contracts and a benchmark auction price in three currencies, describing each market on its own terms rather than a standardised cross-metal comparison. No currency conversion is applied.

The social inventory draw is three times the previous week’s 25 tonnes, but the warrant categories moved in opposite directions and are not additive to the social total.

Palladium’s Balance Turns

Source: Johnson Matthey PGM Market Report, 14 May 2026. Annual forecasts, not observations. Total supply falls 265koz while demand falls 895koz, so the first surplus since 2012 arrives with mine production at a two-decade low in Russia. Automotive demand accounts for 398koz of the decline; every other category combined accounts for 497koz.

01 — Gold’s Reversal

Five consecutive lower closes took Au99.99 from ¥901.57 to ¥864.00, and Managed Money net length has now fallen for five reporting weeks from 133,116 contracts on 15 September to 104,206, a reduction of 21.7%. The five-week positioning decline has now been joined by a reversal in Shanghai prices. The question is whether the liquidation continues from here.

02 — Palladium’s Short Concentration

Gross shorts of 17,434 contracts against open interest of 24,916, in the smallest of the four markets, with the net short 2.8 times its 8 September level. Palladium has now set three contract lows since listing. The balance sheet explains why the position is not obviously vulnerable, but a short of this size still describes exposure rather than conviction.

03 — Silver’s Short Acceleration

Gross shorts rose 2,492 contracts to 12,675, a 24.5% increase in one week and roughly double the previous week’s addition, while gross longs rose modestly. Silver’s net long share of open interest has fallen from 7.2% on 6 October to 5.2% and now 3.1%. A further reduction of this magnitude would bring silver close to neutral Managed Money positioning. Whether that occurs depends on subsequent changes in both gross longs and shorts.

04 — Silver’s Inventory Draw

Seventy-five tonnes, three times the previous week and approximately 1.9% of the base, against a second consecutive week of heavy price declines. The survey predates Friday’s sharper fall, so it does not capture any response to the week’s lowest prices. SGE warrants rose while SHFE warrants fell, which looks like redistribution rather than uniform depletion.

05 — Platinum’s Prompt Market

Ingot suppliers quoted ¥1 to ¥2 per gram over the PT2612 contract with available ingot described as relatively tight, while cumulative imports remain roughly 10% above last year at around 71 tonnes. A comfortable aggregate inventory and a thinner prompt market are different things, and the premium is evidence of the second rather than scarcity of the first.

06 — The US Palladium Trade Case

Commerce determined a Russia-wide dumping margin of 132.83% on 28 April, but the International Trade Commission made a negative injury determination on 29 May and no duty orders were issued. The margin continues to circulate as though it were an operative tariff. It is not, and assessments of Russian metal rerouting should not assume one.

The surplus is forecast. The supply expansion isn’t.

Gold’s separation from the complex lasted exactly one reporting period. Shanghai gold fell 4.17% across five consecutive lower closes while silver fell for a second week, and Managed Money reduced net length in all four metals again — through long liquidation in gold, accelerating short accumulation in silver, and new shorts in platinum.

Palladium is the more important analytical development. Managed Money now holds short positions against 70.0% of total futures open interest, and the market is forecast to move into its first surplus since 2012. But that surplus arrives while mine supply falls 557,000 ounces, with Russian production at a two-decade low accounting for roughly 90% of the decline. Total demand falls by 895,000 ounces against a 265,000-ounce decline in total supply, producing a demand-led swing into surplus, and the larger part of that demand reduction comes from outside the automotive sector.

The question is whether the demand weakness underpinning the forecast surplus persists. With Russian primary supply already contracting and speculative shorts unusually concentrated, revisions to demand or production could materially change the balance.

Data: CFTC Disaggregated Commitments of Traders, positions 20 October 2026, published 23 October; Shanghai Gold Exchange daily closing prices of 16 and 23 October 2026; Shanghai Metals Market releases of 21, 22 and 23 October 2026; LBMA Palladium Price AM, 23 October 2026; Johnson Matthey PGM Market Report, 14 May 2026; US Department of Commerce, 28 April 2026, and US International Trade Commission, 29 May 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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