Gold keeps hitting new highs… but the real money is made in this cycle
Hey folks,
Some days the market trades earnings and economic data. Today it traded politics.
Here’s what I’m seeing.
China And The Farm Belt.
Trump’s back leaning on China. No shock there. China hasn’t been buying our ag products in response to tariffs, and farmers are feeling it. Now the idea on the table is to cut China out of soybean oil trade — “we’ll make it here.”
Fine in theory, but who’s making it, and where? Crushing beans into meal and oil takes capacity, labor, logistics, and time. You don’t flip a switch and replace a major trading partner overnight.
Meanwhile the government’s still shut down, which means the usual relief payments to farmers aren’t going out. So they’re caught in the middle — prices hit by tariffs on one side and cash flow squeezed by Washington on the other. That’s a bad one-two punch for the folks actually growing the crop.
From Shutdown Headline To Powell Headline.
House Speaker Mike Johnson floated that this could be the longest shutdown in history. The market didn’t like that and sold off early. Then Powell spoke and traders basically shrugged off the morning drop. That’s a “political market”: one headline down, next headline up. Not a lot of steady footing, just swings.
How I’m handling it, plain and simple:
- Don’t chase the first move. In a headline market, the first reaction isn’t always the real one. I want to see if buyers or sellers hold control into the close.
- Define risk on every trade. I’m favoring structures where I know the max loss walking in (spreads or tight stops).
- Keep size modest. Until the shutdown ends and the data flow normalizes, I’m not out there swinging a sledgehammer.
- Let levels lead, not opinions. I’ll trade what price confirms, not what a podium promises.
A few quick reads across the board:
- Ag complex: If we start talking real domestic substitution for soy oil, watch the crush spread logic — could be supportive for crushers while farmers still wrestle with cash flows. Near term, the shutdown slows everything from data to payments, so I’m cautious on chasing spikes.
- Energy: Political risk stays elevated. I’m not married to a direction here — just trading the levels and letting inventories and cracks do the talking.
- Metals: Gold and silver have been leaders; I still like them on orderly pullbacks with tight risk. If the “calm” headlines return, they’ll breathe — doesn’t change the bigger trend unless key support breaks.
- Indexes: We sold off on the “longest shutdown” comment, then recovered on Powell. That’s all you need to know about who’s really running the show today: headlines. I’m looking for confirmation — reclaims that stick — before I press anything directional.
It’s a political market right now. China rhetoric, farm pain, shutdown chess moves, a Fed sound bite — each one can yank price around. That’s fine. We adapt. Smaller size, defined risk, and we let the market show its hand before we push chips in.
Stay sharp,
— Geof
