Friday Thoughts

What is Gold telling us?

May is coming to a close. Much of the macro action was seen in government bonds, with yields reaching new highs before reversing back close to where they started the month. Stocks are still powering higher, fueled by AI and the upcoming IPO frenzy. A war couldn’t derail the train, and the rise of 10-year yields to 4.7% also did not soften the enthusiasm. Dominance is reality.

I spent much of the month actively finding refuge from the political noise while thinking, observing, and mapping the likely road ahead. I have been burying my head in charts and history, trying to shape a picture of thinking that will dominate markets in the weeks and months to come. Some of my initial thoughts were captured in the post below, where I analysed a historical sequence and tried to find parallels to today. I have more to say on those topics and will publish further posts to subscribers. I think there are exciting times ahead for those who prepare appropriately.

While markets might currently signal very benign conditions, there are setups and undercurrents worth monitoring. I have been looking at Gold, which brought me so much joy over the past few years. The precious metal’s action might not be in the news limelight, as it’s currently in a downtrend, but its relative underperformance to both equities and bonds is interesting. Yesterday, Gold threatened to close below the 200-day line, and we know nothing ever good happens below that line. Behind the paywall, I analyse the current setup, and we go back in time and see what it is trying to tell us.

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Let’s now dig into the world of Gold and what its current trajectory is telling us, before we read Macro D’s latest thoughts and Macro FX implications on his running book and positions.

Have a wonderful weekend ahead!