To The Moon

The latest US inflation data had raised concerns that the Federal Reserve could deliver three rate hikes this year. However, recent CME FedWatch data indicate little risk of an additional hike in October. Combined with the continued decline in Treasury yields, this suggests that risk on trading may dominate in the near term. As the fourth quarter approaches, however, any rally in risk assets could prove to be the “last dance.” Even a sharp advance should not be mistaken for a durable trend.

$E-mini S&P 500 - main 2612(ESmain)$ $S&P 500(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $Micro E-mini S&P 500 - main 2612(MESmain)$ $Cboe Volatility Index(VIX)$

The 10 year US Treasury yield, a key gauge of market sentiment, has failed to make further headway over the past two weeks and pulled back sharply last week and early this week. Although the broader trend shows no clear sign of reversal, a short to medium term correction and normalization appear increasingly likely. Greater stability in the bond market should ease the main macro pressures and support equities, commodities and crypto assets.

$Invesco QQQ(QQQ)$ $NASDAQ(.IXIC)$ $E-mini Nasdaq 100 - main 2612(NQmain)$ $Micro E-Mini Nasdaq 100 - main 2612(MNQmain)$ $Dow Jones(.DJI)$ $E-mini Dow Jones - main 2612(YMmain)$ $Micro E-mini Dow Jones - main 2612(MYMmain)$ $SPDR Dow Jones Industrial Average ETF Trust(DIA)$

The data also clearly indicate little risk of a rate hike at next week’s FOMC meeting. The current target range is likely to remain in place through year end, with the next hike expected thereafter.

Under this framework, gold deserves close attention this week. Compared with crypto assets, gold has underperformed over the past two months and failed to participate in the broader risk on move. If market conditions improve, gold and other precious metals could have room to catch up.

$Gold - main 2612(GCmain)$ $E-Micro Gold - main 2612(MGCmain)$ $1-Ounce Gold - main 2612(1OZmain)$ $Silver - main 2612(SImain)$ $E-mini Silver - main 2612(QImain)$ $iShares Silver Trust(SLV)$ $XAG/USD(XAGUSD.FOREX)$ $ProShares Ultra Silver(AGQ)$ $100-Ounce Silver - main 2612(SICmain)$ $SPDR Gold ETF(GLD)$

Gold has rebounded from its lows in each of the past two weeks and is showing signs of a potential wedge pattern. This suggests that the rebound could be meaningful in both scale and momentum. The $4,242 to $4,259 resistance zone will be the key focus. A breakout confirming either a small double bottom or a trendline break would imply a minimum target near $4,370. Under a stronger scenario, another move above $4,700 cannot be ruled out.

However, pressure from the broader trend remains unresolved, while adverse macro and cross market factors persist. Countertrend trades therefore carry significant risk. Even if gold reaches its rebound targets, renewed downside remains the main scenario. A break below $4,091 before any upside breakout would also provide a clear bearish continuation signal.

Silver’s technical outlook is less constructive, with both the daily and weekly charts resembling bearish continuation patterns. Its higher volatility could produce a faster rebound, yet its downside risk remains greater than gold’s, making it unsuitable for rebound trades or bottom fishing. Meanwhile, the gold to silver ratio appears close to breaking resistance at 73. Such a move could set the stage for renewed long term divergence between the two metals and reinforce gold’s role as a safe haven asset.

For the existing Ethereum position, the stop should be adjusted after the first target was reached to guard against renewed upside risk from a sharp rebound.

$Bitcoin(BTC.USD.HKCC)$ $Bitcoin(BTC.USD.CC)$ $CME Bitcoin - main 2610(BTCmain)$ $iShares Bitcoin Trust(IBIT)$ $Ethereum(ETH.USD.HKCC)$ $iShares Ethereum Trust ETF(ETHA)$ $VanEck Ethereum ETF(ETHV)$

For Ethereum, half of the short position entered at 2,645 was closed for profit at 2,380. This week, the stop on the remaining position will be lowered to 2,500. The target for the other half remains unchanged at 1,850.

The euro reached another low last week but could rebound this week. A more conservative short entry is therefore preferred. Place a limit sell order at 1.1430, with a stop at 1.1580 and a target at 1.0900.

For crude oil, new limit buy orders are placed at $83 and $75. The stop is set below $67, with a target at $115.

No pending order will be placed for gold this week. However, investors can watch for a stronger rebound following a break above $4,242 or consider gaining exposure through call options.

P.S. Once a trade reaches its first target, the stop will automatically move to the entry price. Any adjustments after execution will be provided in future updates.

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