To The Moon

With the U.S. government still shut down and no sign of a deal, the standoff could break duration records and prolong risk sentiment, whose economic impact remains to be seen but is unlikely to fade quickly in the near term. Hopes that the Israel–Gaza conflict might cool were dashed by fresh airstrikes in Gaza over the weekend, underscoring that peace will not be achieved overnight and that safe-haven demand may be repeatedly rekindled, fueling large price swings driven by sentiment rather than trend change. In such an environment, countertrend trading requires extra caution because volatility in a sentiment-led market does not automatically mean the underlying trend has reversed.​

Has precious metals topped?

Drawing on years of futures-market experience, the piece notes that while every squeeze is different, price patterns often rhyme: during squeezes, it is hard to find fundamental or news-based catalysts signaling a turn, aside from technical calls for reversal. True market reversals usually coincide with unexpected, critical information; absent that, the move may not be finished or could enter a range, so confirming any squeeze reversal requires alignment between technicals and fundamentals.

Technically, because squeeze moves trend and accelerate in one direction, once sentiment flips the reversal is often swift and wide, making a simple 5-day moving average a useful discriminator of whether a squeeze has turned.​

The 5-day signal

Despite a sharp pullback last Friday, gold still closed above its 5-day moving average; if Monday fails to close above the 5-day, the probability of a precious-metals reversal rises and a deeper gold drawdown becomes more likely. Conversely, if Monday extends higher, there is no presumption of a top in a squeeze, and the upside can exceed expectations—recalling that in the 1970s the final doubling in gold occurred within a single month—so the immediate focus should remain on the 5-day moving average. In short, monitor the 5-day line closely: a close back below it would flag higher reversal risk; a sustained hold above it would leave the squeeze intact with potentially outsized upside.​

Gold–silver ratio

Even with the recent surge in precious metals, the gold–silver ratio remains within its typical 75–90 range, with silver’s catch-up bringing the ratio down toward roughly 80 at the lows. From a relative standpoint, whether the next move is up or down, gold remains the more “stable” asset versus silver in terms of volatility rather than direction—gold tends to rise less in rallies and fall less in declines compared with silver. While silver rallies often come with narratives about inventory shortages, surging future demand, or even central banks holding silver bars as reserve currency assets, the article cautions against over-believing such claims since silver is not inherently scarce and is recyclable, leaving leveraged longs vulnerable if prices turn lower.

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