Precious metals are rising quite strongly, with several at or close to long-term high prices.
- The new week begins with a focus on precious metals, which are all rising in early trading as the week begins.
- Platinum is rising very strongly and currently trading at a 12-year high price.
- Gold is rising firmly and its all-time high made last October is in sight.
- Silver is also rising firmly and might test its record high made last week.
- Palladium is rising very strongly but is still far away enough from its long-term high price that it is unlikely to test it today.
It makes sense for trend and momentum traders to either enter long trades or get ready to do so following a breakout. My preferred strategy is to wait for the New York close. Platinum has already broken out so I will be entering a long trade with half my normal position size later today, I am already long of Silver in the same way.
- Most stock markets are trading higher than Friday’s close, and are rising in tandem with precious metals, but more weakly. The S&P 500 Index dropped quite sharply on Friday after getting near its record high. We may be seeing a bearish topping out, but a bullish breakout to a new record cannot be ruled out this week. I will enter a new long trade if we get such a breakout at today’s New York close.
- President Trump has tried to talk down inflation, saying effectively that it has been totally conquered, which many analysts would disagree with. He wants to see lower rates and hopes whoever he appoints in May 2026 as the new Fed Chair will cut rates aggressively. According to the CME FedWatch tool, sentiment has shifted over the weekend: markets are now expecting two rate cuts of 0.25% over the course of 2026, and not just one. This will be a major reason why precious metals and the US stock market are rising today.
- In the Forex market, since the Tokyo open, the Japanese Yen has been the strongest major currency, while the New Zealand Dollar has been the weakest, which is possibly due to the RBNZ remarks earlier about the probability of rate cuts. The USD/MXN currency pair is testing very long-term lows, having reached a new 17-month low just now. Many Forex brokers pay positive swap on short positions, which could make this an attractive carry trade.
- There will be a release of Canadian CPI (inflation) data today, which is widely expected to show a small month-on-month increase of 0.1%.
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