Gold Hits $3,700, Crypto Melts Down, and Powell Could Flip the Market Again

This article first appeared on GuruFocus.

After the Fed’s first rate cut of the year lit a fire under equity markets, the week opened with a sharp mood shift. Futures on the S&P 500 (SPY) gave back 0.2%, cooling from last week’s record close, while crypto markets unraveled under the weight of more than $1.5 billion in long liquidations. Porsche (POAHY) suffered its worst drop on record after walking back EV expansion plans, adding to the drag. With the earnings calendar in pause mode and macro data largely absent until Friday’s PCE release, the market could driftcaught between hope and hearsay. Panmure Liberum’s Joachim Klement calls it the calmest week of the month, but also flags a rising wave of investor overconfidence in the six-month outlook.

The precious metals trade, meanwhile, is on a tear. Gold soared past $3,700 an ounceits highest level everas ETF inflows hit a three-year high. Silver followed suit, reaching levels not seen since 2011. Lower interest rates are helping fuel the bid, alongside demand from investors searching for protection against geopolitical volatility and lingering trade friction. XTB’s Kathleen Brooks says gold could remain well supported as both an inflation hedge and a beneficiary of renewed Fed easing. Traders are now pricing in nearly two more cuts this yearan expectation that has added momentum to bullion’s 2025 rally, already up over 40%.

Attention now turns to Fed Chair Jerome Powell and Governor Stephen Miran, both scheduled to speak this week. Deutsche Bank’s Jim Reid expects officials to put their own spin on what he described as a complicated FOMC last week, where the dot plot sent mixed signals. Global PMIs tomorrow are unlikely to jolt markets, given relative macro stability. But with core PCE expected to cool on Friday, and the next payrolls report just around the corner, investors may be using this lull to recalibrate expectations. In the absence of hard catalysts, Powell’s tone on Tuesday could be the key swing factor.