As I wrote in the early heads-up message to my subscribers, the USD Index is declining.
The most remarkable thing about this decline is that gold is declining anyway.
Will the USD Index revive, pushing gold even lower?
I think that this is the likely outcome.
The long-term support is very strong and can push the price back any day or hour now. We’re very close to USD’s monthly turning point, so it’s even more likely.
And while Trump appears to aim to lower Powell’s authority by discussing who will be his successor (and the markets appear to be concerned), this is likely a very temporary and emotional reaction. Powell’s term ends in May next year, not earlier. And Trump still needs some results and stability according to his approach.
The above seems to be just a retaliation after Powell said that tariffs are going to be inflationary and that they are generally negative to the economy. Well, as an economist, he couldn’t say anything else, but it seems that this made Trump unhappy, and we got what we got today. The markets are reacting, but nothing is changing on the fundamental front – and it’s not going to until May 2026 – at least as far as who’s leading the Fed.
Gold is down.
Miners are down, which is remarkable given that the S&P 500 also moved up today.
There were times when miners were strong vs. gold and stocks, and those times are over. We’re in a downtrend now, even though it might not be apparent based on price action alone.
It is obvious when you consider how miners “should” be moving now vs. what is actually taking place.
Silver is up, and it’s already after an intraday reversal.
This is remarkable because of two reasons:
1. This is exactly what happened right after the previous major tops (marked on the chart)
2. This is what we know to be a short-term sell signal – silver’s short-term outperformance of gold while miners are not doing the same thing.
If you don’t have a short position in silver or if you think that the size of your position is not big enough, and you were looking for a good moment to enter the trade – in my opinion the current setup provides a very good risk to reward ratio.
Meanwhile, stocks are testing their all-time highs (and Paul Rejczak’s long position is more profitable now).
Will they be successful?
On one hand, they just keep pumping money into the system, which could push everything up.
On the other hand, money has been pumped into the system ever since the gold standard was abandoned, and huge declines in stocks still happened.
The U.S. economy just shrunk by more than it was expected, and we’re seeing a breakout to a new high in U.S. stocks – on the same day? While the markets with relatively poor fundamentals (global growth being hit by tariffs and perhaps whatever damage will come from the Israel-Iran conflict): copper and platinum are soaring?
The simplest and most likely explanation, in my view, is that the investment public is entering the market while institutions are getting out (which explains declines in gold). That’s the distribution pattern that accompanies major tops.
Having said that, I have an announcement.
New Service on Golden Meadow®
A new service was just launched on Golden Meadow® called Seasonal Trading Primer. Provided by Ryan Mitchell, this service is about taking short-term trading signals from market pros with a good track record (with their approval, of course; Ryan is currently focusing on trading signals from Rick Ackerman), and combining them with seasonal analysis, further enhancing their reliability. The concept is quite simple, but in my view it’s likely to produce great results. The first issue is available for free and there’s a 10-day free trial if you’re willing to give it a shot (and yes, I think it’s a good idea to at least test it).
If you gave Rick’s services a try in the past, liked them but also found them too complex or difficult to use, you’ll likely love what Ryan is providing.
Of course, the Diamond Package subscribers have it added to their service automatically, without any additional payment or price increase.
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Thank you.
Przemyslaw K. Radomski, CFA
Founder, Editor-in-chief