Unnatural Price Action
April gold futures traded up to $5626 on Wednesday night in what can only be described as a frantic panic buying short squeeze.
Following up on my last two posts here and here, we are witnessing increasingly frequent dislocations across markets. Including a frantic short-squeeze rally in gold futures on Wednesday night (Thursday morning in Asia).
March silver futures reached a high of $121.78/oz and gold traded up to $5626.80 before reversing lower Thursday morning:
April Gold (30-minute)
The CBOE Gold Volatility Index (GVZ) is close to its March 2020 covid crash highs.
GVZ (Weekly)
Outsized spikes in options implied volatility AND realized volatility often closely coincide with major turning points in a market (for examples of this in gold see September 2011, August 2018, and March 2020).
In September 2011, the large spike higher in GVZ marked a peak in the gold price. Meanwhile, in August 2018 and March 2020 the GVZ spikes coincided with gold market bottoms.
Did anyone notice that mega-cap tech giant Microsoft (Nasdaq:MSFT) is in a confirmed downtrend, gapping lower to its lowest levels since May 2025?
MSFT (Daily)
Microsoft delivered an earnings beat, but signaled that growth is slowing. The narrative appears to be shifting from “AI + cloud is unstoppable” to “how long until all this expensive AI infrastructure pays off?”
Is that a long-term double-top on the weekly chart?
MSFT (Weekly)
Speaking of AI data centers, did you guys see copper this morning?
At its Thursday morning high, COMEX copper was trading up more than 11% to an all-time high price of $6.58/lb. Prior to 2025, a 5%+ daily move in copper was unthinkable, let alone a 10%+ move over the span of 12 hours.
Copper (Daily)
Unfortunately, or fortunately depending upon ones perspective, nearly the entire overnight rally has been erased as of lunchtime.
These are unnatural market moves in an increasingly dangerous global macro-market environment. The cracks are widening in U.S. equities amid a stalling mega-cap tech sector (QQQ), the former market leader.
Meanwhile, the equity market leadership baton has been passed to commodities—at the end of 2025 energy was the most out-of-favor sector in the entire market, in January it is hugely outperforming.
XLE (Weekly)
Precious metals have obviously been running hot since the end of 2025, but this week we are witnessing a notable divergence: Many gold and silver mining stocks have succumbed to selling pressure, despite the new highs in the metals.
NEM (Daily)
HL (Daily)
The small/micro-cap TSX-Venture Composite peaked on Monday and has since begun to roll-over:
TSX-Venture Composite (Daily)
This is a divergence that we will be closely monitoring, but it is not totally surprising given that this index has rallied nearly 50% in a straight line since the end of November.
This is an increasingly dangerous market, and the moves in precious metals are confirming that not all is well in the world. While I am positioned to benefit from further upside in metals, I am also cognizant that sometimes we should be careful what we wish for.
If you are confused by today’s market volatility and/or wondering how to reduce your risk exposure, I’ll once again point out the Chevron (NYSE:CVX) monthly chart:
CVX (Monthly)
Chevron gives oil & natural gas exposure with a fortress balance sheet and a decent dividend.
If you are also looking for something more boring than junior mining, with an asymmetric risk/reward profile, please have a look at PFIX:
PFIX (Daily)
PFIX is an exchange-traded fund designed to hedge against a sharp rise in long-term U.S. interest rates. It’s not a traditional bond fund — it’s a tail-risk hedge that uses derivatives to potentially benefit if rates spike higher, especially at the long end of the yield curve (like the 20–30 year Treasury yield).
I view the recent gold and silver moves as foreshadowing a move to much higher U.S. Treasury yields in the coming months/years.
I’ll leave you with a 5-minute clip from Warren Buffett circa 2006, please listen:
“What the wise man does in the beginning, the fool does in the end.” ~ Warren Buffett
Disclosure: Author owns shares of CVX and PFIX at the time of publishing and may choose to buy or sell at any time without notice.
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