S&P 500 Support Just Broke: Big Money Unwind Spreads | Gareth Soloway

Gold's Volatile Reversal [00:00]

• Gold plummeted below $4,000 before rallying over $100 to trade above $4,100.
• Silver saw an even faster surge, rising more than 3%.
• Stocks and short-term Treasury yields also experienced significant volatility.

  "All right, now the Fed holds and gold broke below $4,000 this morning, now trading above $4,100, a reversal of more than $100 from its session low."

Fed's Hawkish Hold and Market Reaction [01:09]

• The Federal Reserve held its benchmark rate steady for the fifth consecutive meeting, but the vote was a hawkish 9-3, with some members favoring a rate increase.
• Chair Kevin Warsh emphasized that higher rates could be part of the solution to inflation and that the Fed would not hesitate to act.
• Markets initially reacted positively to the hold, driving gold, silver, and stocks higher.

  "I mean, the Federal Reserve held its benchmark rate at 3 and 1/2 to 3 and 3/4% today."

Gold's Technical Breakout Potential [04:06]

• Gold's ability to close above $4,100 on a daily basis is crucial for a technical breakout.
• A sustained move above this level would signal a short-term breakout, though a rapid surge to new all-time highs is not anticipated.
• The expert remains skeptical until gold clears and holds above the trendline, noting a potential downside before a longer-term upward move.

  "So, I mean, great move on gold, but look at how this this what we call it wedge pattern in technical analysis has behaved."

Factors Influencing Gold Prices [06:27]

• A falling US dollar is seen as a positive catalyst for gold prices.
• High oil prices are pushing up 10-year yields and inflation expectations, which could pressure gold.
• Weakening jobs data could lead to a fall in the dollar, benefiting gold.

  "And really the other thing too is the dollar's been hovering here."

Gold's Long-Term Forecast: $13,000 Target [08:43]

• A proprietary calculator projects a potential peak for gold around $13,000 between 2029 and 2031.
• This forecast is based on factors including global money supply growth, US deficit, global debt, real rates, and inflation.
• Shorter and more dramatic cycles in gold are expected due to these economic conditions.

  "Now, some investors will hear that and celebrate, others will immediately roll their eyes as you know, but build that bridge for us."

Drivers of Gold's Potential Rise [10:41]

• The calculator incorporates debt issuance pace, global money supply, fiat mistrust, and real interest rates.
• A base case scenario projects significant increases in debt and money supply, leading to higher gold prices.
• If real interest rates turn positive, the model suggests a lower target of $6,000.

  "The calculator accounts for all of those cycles, right? Or all of those factors."

Gold vs. Dollar Value [11:31]

• A $13,000 gold price would reflect a significant decrease in the dollar's value rather than just gold becoming more valuable.
• The US dollar's strength is relative to other currencies that are also printing money.
• The inability to return to Volcker-style interest rate hikes due to high US debt suggests sustained gold appreciation.

  "Yeah, and I think it's I think it's more about the structural need for people to have security, and it's the fact that the dollar needs to be measured."

Risks to the Gold Forecast [13:11]

• The $13,000 target could be reconsidered if AI creates deflationary pressures or significantly boosts productivity.
• The model allows for adjustments based on changing economic conditions, such as positive real interest rates.
• Users can input their own variables into the calculator to explore different scenarios.

  "Yeah, and so so, for instance, if we saw, let's say, AI create deflation, if we saw the productivity going up substantially, but again, that deflation being created by AI, that would be something that we'd have to take take account."

Investment Strategy: Gold, Silver, Miners [19:30]

• For a 3-year horizon, gold is recommended as the safer, long-term investment due to its direct link to US debt and global fiat printing.
• Silver is seen as potentially underperforming gold due to its industrial demand and sensitivity to economic slowdowns.
• Gold miners (GDX) are expected to outperform gold eventually but come with higher risk.

  "I would choose gold for the longer term and and I say that mainly just because it's safer, right?"

Tech Stocks Facing Sell-Off [20:35]

• Global technology stocks are experiencing significant declines, with South Korea's KOSPI falling sharply.
• Companies like SK Hynix saw stock drops despite strong profits and increased capital spending plans.
• The market is questioning the return on massive AI-related capital expenditures.

  "Meanwhile, stocks having a very interesting day, short-term Treasury yields as well, and crude oil remains sharply higher."

Market Structure and Tech Sell-Off [22:34]

• The use of 3X leveraged ETFs in markets like South Korea can accelerate both upward and downward price movements.
• Forced selling due to these leveraged products can exacerbate market downturns.
• The AI memory space experienced a significant sell-off, following the pattern of "when everyone is screaming buy, it's usually time to sell."

  "And the problem with that is it's great on the way up and accelerates the move, but when people sell that, then it's 3X shares on the way down."

S&P 500 Trendline and Potential Correction [26:35]

• A critical trendline on the S&P 500, connecting highs from 2021 and 2025, is a key level to watch.
• A daily close below this trendline around 7330 could signal a significant correction, potentially down to 7,000.
• The market is showing signs of rolling over, with the S&P 500 nearing the day's lows.

  "Here's a trendline going back to the highs in 2021's bull market connected through this high here in 2025."

Oil Prices and Geopolitical Risk [30:45]

• Crude oil prices remain elevated, trading above $80, due to ongoing conflict in Iran threatening supply.
• The expert previously shorted oil near technical resistance and has exited the trade, awaiting a clear breakout or breakdown.
• Market participants are likely waiting for geopolitical tensions to subside, possibly as midterms approach.

  "You know, and obviously there's one chart that's complicating everything today, that's oil."

Shifting Investor Sentiment and Safe Havens [33:16]

• Investors are seeking safety amidst market volatility, with a rotation into cash and defensive stocks like Conagra and Clorox.
• While tech stocks are weakening, some believe a bounce is possible, but long-term outlook remains cautious due to cyclicality.
• The S&P 500's close relative to the 7330 level is a key indicator for the near-term market direction.

  "So, for me it's going to be seeing where the markets close and then seeing do we see continuation on the S&P 500."