Hey folks,
Let’s not sugarcoat it: the market’s on drugs.
The past few days have been a blur of reactionary moves—rallies sparked by rumors, pullbacks triggered by politics. And caught in the middle of it all? Gold.
After running up nearly 12% this month, gold finally took a breather this week.
And while some might be panicking, I’m letting you know that’s a good thing.
I’ve been saying for weeks that gold needed to cool off a bit, and we finally got that.
I was personally looking for a move down to around 3,245, which would’ve been a clean 50% retracement of the rally which saw it go from about 2,968 to an all-time-high of nearly 3,510.
We didn’t quite make it there — but we did get a 6.5% pullback to about 3,275, and that might’ve been enough.
So is the correction over? Maybe.
But here’s what moved the market — and by extension, gold — so far this week:
- First, Trump didn’t fire Powell.
That may sound ridiculous, but it was a real fear. Trump blasted Fed Chair Jerome Powell on Truth Social recently, calling him a “major loser” and saying, “Powell’s termination cannot come fast enough!”Markets don’t like drama at the top of the Fed — but they really don’t like uncertainty about who’s running monetary policy. When it became clear Powell was safe (at least for now), stocks jumped… and gold dropped. - Second, chatter about trade deals ramped up.
Trump has been loudly claiming that countries are “lining up” to strike deals. And whether that’s campaign bluster or grounded in fact, there’s real movement happening.Reports from Bloomberg and others confirm that the U.S. is actively renegotiating bilateral trade agreements — especially in Asia and Latin America.
So now we’ve got a market chasing every headline — those are the drugs I was referring to earlier…
In the meantime, gold, despite its selloff, is still in the spotlight.
Strong trends need to breathe— and this one just might be gearing up for the next leg.
Stay sharp,
—Geof Smith
P.S. Gold’s supercycle is setting up for the next leg higher — and here’s exactly how I’m playing it.
