Gold has surged decisively above its magnet, signaling strong momentum but also flashing warning signs. Prices are now far above the 200-day moving average, and RSI readings show gold is overbought and vulnerable to a pullback. Silver is also racing higher, driven by an aggressive short squeeze. Retail momentum traders are piling into precious metals and mining assets, while more cautious investors are staying on the sidelines.
The immediate catalyst for the move in metals is a sharp surge in the Japanese yen. Japanese and U.S. officials signaled readiness to intervene against currency speculation, prompting yen strength and a decline in Japanese equities, with the Nikkei falling sharply. Lower Japanese bond yields provided some offset, but the yen’s move is weighing on U.S. stocks, particularly technology shares, due to the unwinding risk in yen-funded carry trades. The overall impact remains nuanced, as some global funds are hedged against currency swings while others are not.
Geopolitically, renewed tariff threats toward Canada briefly pressured equities before easing as Canada stepped back from a potential China trade deal. Attention now turns to the upcoming Fed decision and a heavy earnings calendar, led by major technology companies and AI-linked demand trends. Durable goods data surprised to the upside, offering a supportive macro backdrop. Key tickers to watch include $GLD, $SLV, $AAPL, $TSLA, and $NVDA.
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