Fund manager sees gold and silver selloff as long-term buying opportunity

Gold and silver prices recovered modestly on Monday after a sharp selloff that marked their worst October performance since 2008. The decline followed a broader market pullback that saw the S&P 500 fall 2%, its largest weekly drop since early June.

Fund manager Jen Bawden, founder of Bawden Capital, said the recent weakness may create a buying window. > "Silver is about 60% below its $121.64 record, and gold hit a one-year low," she said. > "To seasoned resource investors who understand global capital flows, paper-market mechanics, and cross-asset margin shocks, this is NOT a crisis; it is the exact liquidity air pocket we have been waiting for."

Bawden noted that the Federal Reserve kept rates steady last week, but markets still anticipate further hikes in December, raising the opportunity cost of holding non-yielding assets such as gold and silver. She added that higher rates are also pressuring equity markets and that geopolitical uncertainty, especially the ongoing Middle East conflict, is driving demand for U.S. dollars, which in turn weighs on precious metals.

She explained that when oil prices rise, energy-importing nations must sell their own currencies to buy dollars for oil purchases, adding further pressure on gold and silver. Bawden warned that while the current selloff could deepen before a sustainable bottom forms, historical patterns suggest that similar liquidity-driven declines in 2008 and 2020 were followed by strong rebounds.

Looking ahead, Bawden expects physical demand in Asia, particularly from China, to provide some support for silver, though she acknowledged that Chinese taxes reduce the apparent premium. She maintains a long-term bullish view on hard assets, citing rising sovereign debt and the likelihood that central banks will eventually ease monetary policy, which could boost demand for tangible assets.