Hey there,
Markets are chasing their own tail today — rallying one minute, dropping the next, and reacting to rumors like it’s earnings season on fast-forward.
We started the morning heading lower — no surprise there, given the week we’ve had. But then, out of nowhere, a rumor started flying that the tariffs were going to be short-lived.
Just like that, the market rallied.
Of course, once the rumor got squashed, the market gave it all back and dropped again. Classic whipsaw stuff.
And we’re talking massive moves — over 5% up and 5% back down in just a few minutes at some points.
Now let’s talk about gold.
Last week, gold futures (/GC) hit $3,200 — a big move — before quickly backing off.
I had figured it would pull back a little, and sure enough, it’s given up nearly $200 since then. But what’s interesting is why.
Normally, people think of gold as a safety play. When markets get rocky, gold should go up, right?
Well, not always.
What we’re seeing now is what I call “crisis behavior.”
When the market starts bleeding, traders often sell their winning positions — like gold — just to cover their losses in stocks. It’s not that gold suddenly became a bad trade. It’s just like an ATM they’re pulling cash from.
Same thing with bonds today. Selling pressure there is giving the dollar a little bump — and with much of gold’s recent gains having come from dollar weakness, that’s not helping gold either.
So what am I watching now?
Keep your eye on the $2,950 level in gold. That’s support. If it breaks down below there, we could see an even deeper correction in store for the yellow metal.
If that happens, I’ll be looking at how the market responds around that level — and whether or not buyers step back in once they’ve stopped panicking.
Crazy day out there. Be careful, stay alert, and as always…
Stay sharp,
—Geof Smith
P.S. Market craziness aside— I’ve isolated one powerful energy play that pays me week after week. And I’m sharing all the details right here.
