Gold breakout above $2,500 per ounce
Gold broke to a new high above $2,500 per ounce, boosted by growing expectations of a September Fed rate cut. Long-term Treasury yields fell, and the Dollar weakened. Stocks lifted, but there are concerning signs of tighter liquidity in financial markets.
Low crude oil, base metals, and iron ore prices also reflect weak industrial demand from China, which threatens to slow global growth over the next decade.
Treasury Markets
Ten-year Treasury yields retreated to 3.9% as expectations solidify for a Fed rate cut at the September 17-18 FOMC meeting. Another Trend Index peak below zero warns of long-term selling pressure.

Dollar & Gold
The Dollar Index broke support at 102.50 while the Trend Index again peaked below zero, continuing to warn of long-term selling pressure.

Gold broke resistance at $2,475 per ounce, offering a target of $2,600. Expect retracement to test the new support level, but rising Trend Index troughs above zero signal long-term buying pressure. Respect of support is likely to confirm a fresh advance.

Silver also rallied, testing resistance at $29 per ounce. Breakout would signal that the downtrend has likely ended.

We expect gold to outperform silver because of weak industrial demand from China.
Stocks
The S&P 500 edged higher but failed to show the same enthusiasm as with precious metals.
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Author: Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.