Last week, the DOW tapped into $50,000 territory. While for many, this may look like a next leg up, to me it looks like a (temporary) top. The markets seem to be exhausted. A rotation from tech to metals (not only precious metals, but any metals) and commodities seems inevitable.
Why is the price lingering next to the top so much?
For one, there’s hope that Trump can and will broker a deal with the Iranians, to keep the Strait of Hormuz open. Except, if we zoom out to see the bigger picture, it’s not in America’s best interest to do so. It’s in America’s best interest to drag this along for a while, at least until Venezuelan oil deals are brokered, for USA to be embedded in the profits.
Secondly, companies are expected to become so efficient through AI that inflation levels become irrelevant. That’s a dangerous can of worms. A prolonged power outage (long enough to outlast generators’ capacity) can bust this dream. And threat actors are (most likely) lying in wait.
Third, there’s hope for a new wave of tax cuts trademarked Trump. Not only that, but there’s hope for a removal of bureaucracy acts, which is supposed to prevent massive investors from going into cash.
And here, fourth, Q1 earnings, powered by AI hardware, blinded the regular investor. This blindness is powered by the expectation that Kevin Warsh will cut short-term rates, so much so that the cost for banks to borrow money would significantly lower, thus creating an artificial safety net for the financial system, despite the real economy getting battered.
With this entire reasoning in mind, I’ve entered a Long on XAG (silver). Obviously, it’s not perfectly timed to the dot. But I have the patience to take corrections below the entry and wait for the big money to trickle in. $95 doesn’t look like an unrealistic price. To me, XAU (gold) has always been too manipulated to enter. Keep your eyes on the charts, we are in silver for now. My current entry is $77.27, and my breakeven is $77.98. I’m working on drawing the breakeven lower, either for larger profits later on, or an earlier Take Profit, if WTI (oil) seems to present a better opportunity by that time.
