evening wrap, may 15

market vibes

icymi…“[gold” could hit $6,000 per ounce by early 2029.” JPM report on or about May 9, 2025 via X

The star of the show in NY today was gold, unexpectedly rallying 3.4%.

From 2 AM in the early London session to 12:30 PM, an hour before the Comex pit close, June gold posted 11 consecutive hourly bars with higher highs and higher lows in a vertical “trend day” up. The session had the imprimatur of a very large buyer aggressively time-slicing at least a million ounces, probably more.

With a steady dollar and oil down as much as $2.50 overnight, no one was expecting it—certainly not me. Copper, platinum, and silver had “me too” rallies, but this day was a single-source buy order in gold, in my opinion.

At any rate, gold prices are now boxed between an isolated high on April 22 and an isolated low on May 15, each of equal magnitude, defining a $400 range and executed, if my memory serves me, in the very same manner. There is only one certainty now: one of these extremities will be broken.

By the time prices were in the $3190s and I was covering shorts (GMOAPP), I thought the buyer might be the same major seller at $3500 on April 22: same range in dollars, same time and place of origin. You decide. If my hunch is correct, I’d stay off the right-hand side for a few days.

Finally, this is a 30-session compression study from April 3 to present, exactly in form like the one I posted for crude this morning. In hindsight now, it’s likely the range I was alluding to in my morning note has found a low at $3123, which is also the bottom-of-value for the 30-day sample.

Gold prices should be drawn to these POCs at $3240 and $3325 and trade around one or both until either $3509 or $3123 is broken.

PPI came in way below survey. PPI ex food and energy MOM was expected +0.3% and reported at -0.4%. Other economic data was steady to soft.

PPI saved the bond market (next chart) from its 5% destiny, and it looks like Treasuries are going to trade back to their not-too-distant POCs, 116 and 118 respectively, for the 30-year. Ironic, we were looking at 111.31 twenty-four hours ago.

Oil made its lows at 5 AM, rallied $1.50 into the NYMEX opening, and flatlined for the rest of the session (chart below). Open interest was down on yesterday’s whispers a deal may be done with Iran. More pro-deal news pushed prices lower today.

Fwiw, there are a lot of people in oil who do not want lower prices, but the market is incapable of sustaining $60 without production cuts, and that ship has sailed. The rub is Iran, and they are well aware of their leverage in the moment. Four million bpd is equal to 100% of KSA’s headroom.

Tomorrow is a serial May expiration in stocks. Usually, serial expirations are dull with narrow ranges, but we are at the tippy top of a very thinly traded rally that is a mixed bag of participation: very low Dow and S&P positioning, and very high open interest in NDX. Obviously, the AI story is much bigger than the “golden age,” although they are both written by the same author.

For nearly 3 days after the Bessent news last Sunday, the market literally stopped trading except for retail buying in NDX. Around noon today, NDX popped up to new highs for the month and the week.

It’s likely the shock and awe of a dovish PPI miss finally found its way to stock indexes and gave the late afternoon session another bump. I think… the big money that got out early in February and March is still out, waiting for Godot like Buffett.

DXY and its components were quiet today. Bitcoin fell $230.

my vibe

Most of our markets are developing horizontally and forming ranges around their POCs: DXY, gold, bonds, and oil. Stocks and bitcoin are the exception for now, but I think the mood elsewhere will either enforce ranges where they are or near their all-time highs if they push higher. We are essentailly already there.

Gold is developing at its high and inversely oil is developing on its lows. DXY has been at or occillating around 100 since its inception in the 80s and the best case for bond yields, considering the outlook for Federal debt, is a range at current levels for years to come.

I hate to say it, but the rest of the quarter and half looks choppy and boring. On a brighter note, I’m opening the pool on Saturday.

watch carefully

wind down with van morrison 1979

Night all… good luck in Asia!

JJ

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