Gold Rally Continues as a Government Shutdown Looms

Gold and silver are hitting new highs seemingly daily — the silver chart looks parabolic. “Hi-Yo, Silver!”

Key Takeaways

• Tech Firms Report As the S&P 500 Breaches 7,000: The S&P 500 hit the 7,000 mark for the first time intra-day yesterday, with futures now pointing to an open modestly in the green column. After the market close yesterday, Tesla, IBM, and Meta all beat expectations, while Microsoft’s forecast implied a revenue growth slowdown. Apple earnings are in focus today.

• Parabolic Silver Chart, but a Near-Term Correction Is Possible: The commodity complex is off to a hot start; gold is up another +1.6%, sitting just above $5,500 per ounce, and silver has advanced +0.4% to over the $117 per ounce mark. Do not be afraid if we see a near-term correction in both gold and silver. The bullish story has not changed, but the price action — parabolic for the former and asymptomatic for the latter — has been far too excessive of late.

• The Fed Chair Race Tightens: We can’t imagine that Christopher Waller’s dissent in favor of a quarter-point rate cut will do him any harm as President Trump searches for a new Fed Chair. Waller’s betting odds jumped to 14% after the meeting (from 9% pre-meeting). Meanwhile, Rick Rieder’s betting odds dipped incrementally (from 48% to 40%) after media reports of his donations to Democrats. Waller is clearly a more dovish choice than Kevin Warsh, and potentially more dovish than Rieder.