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“The difficulty lies not so much in developing new ideas as in escaping from old ones.” – John Maynard Keynes
Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.
It’s been another quiet overnight session in the futures market, but that’s not for a lack of events. In Japan, JGBs managed to rally despite a weak 30-year bond auction. In the EU, the ECB just cut rates by 25 bps, and that will result in more ire from President Trump towards Fed Chair Powell. Concerning trade, markets are eagerly waiting for ‘the call’ between President Trump and President Xi as both countries look to make progress on trade talks. Yesterday was also the deadline for countries to make their ‘best and final’ offers, so be on the lookout for any of those details to emerge. Domestically, the status of the GOP’s big, beautiful bill remains up in the air as the Senate is unlikely to pass the bill without major changes, and Elon Musk continues to rail against it.
With all the concerns over deficits and the inability of Congress to rein in spending, it’s easy to understand why precious metals like gold have performed so well. After pulling back to the 50-day moving average in early May, gold prices found support and have seen a good bounce as the yellow metal makes a run for its recent highs. The last year has seen a monster run for gold as prices are up well over 40%, and besides the last few weeks where prices have been rangebound, the only other time in the last year that prices went this long without making a new high were leading up to the election and through year end of 2024.
As gold prices have been digesting big gains from earlier in the year, other precious metals have been playing catch up and moving into the driver’s seat. Let’s start with silver. Prices have been in a much more sideways range over the last year. Both last fall and earlier in the spring, silver traded around $35 an ounce but then quickly pulled back. This week, it made another run for $35 and broke right through to the upside this morning. If at first you don’t succeed, try, try, and try again!
Platinum prices have followed a similar path. Here, the resistance was just below $1,075- a level it approached last summer, last fall, and then again, this winter. It finally broke out from that level in mid-March, and while it briefly pulled back later in the month, this morning’s rally of nearly 4% looks like a convincing breakout.
Within the commodities space, gold, platinum, and silver have all now seen big rallies this year with gains of around 20% or more, and all three are well above their 50-day moving averages as well. Elsewhere in the commodity space, so-called ‘soft’ commodities have lagged. The DB Agriculture ETF (DBA) is barely up YTD with a gain of just 1%, while the DB Oil ETF (DBO) is down by double-digit percentages. Not all commodities are created equal.
