Market regime review and the uncertainty of future directions
Last week, Trump’s visit to China dominated most of the headlines, but after the lively atmosphere and optimistic expectations, it ultimately appears that no substantive outcomes were achieved. This led to a decline in most non-dominant risk assets in the latter part of the week, with both gold and silver signaling that the previous round of a corrective rebound has ended. However, as the summer rally approaches, whether a sustained performance can be achieved remains highly variable.
Weak relative performance signals for precious metals and non-mainstream metals
Silver posted a large upper shadow last week, with a intraday high near $90, but then retraced the gains over the next two trading days. The pace of the rebound is slow, and the rapid decline in a relatively weak environment is a clear bearish signal.
Gold, while relatively resilient to declines, also broke below the near-term low around 4510 at the start of this week, indicating the potential for further weakness on the weekly chart. Beyond gold and silver, other non-mainstream precious metals exhibited similar patterns, with slightly differing magnitudes of decline. Year to date, these assets have been driven by risk-on risk-off dynamics, so a synchronized weakness across the sector can be interpreted as a restart of risk-off in the broader market. Last week, the crypto assets we discussed as a lead for the rebound also matched this hypothesis: price levels came under pressure again, returning to the area below the previously breached support.
Global market posture and divergences in strategy direction
Aside from the strong performance of the stock market, other markets have shown fatigue and renewed pressure. This situation is expected to persist for some time. But whether it will directly trigger a new round of decline remains uncertain.
On one hand, from both fundamentals and news flow, there has been no new progress or breakthroughs in the Middle East, so the market is unlikely to engage in panic selling. On the other hand, the US stock market, as the final fortress, also has not shown clear signs of weakness. If neither of these preconditions is triggered, then the strategy direction after Q2 is expected to continue to favor long positions in strong assets and volatility trading in risk assets.
Warning signals from key interest rates and market sentiment
There is, of course, one asset to watch closely: a breakout would indicate a different scenario. The 30-year U.S. Treasury yield reached a high not seen since the 07/08 financial crisis last week, and the 10-year yield is also showing signs of breaking above a triangle resistance this week. A break above 4.625 would be the first alert, and if it moves further to 5%, even the mighty US stock market could face a pullback and selling pressure.
Overall, although the pullback arrived earlier and certain unfavorable conditions emerged, it has not reached a level requiring a full withdrawal. Moreover, the prior directional judgment has not changed, so a buy-and-hold, “wait-and-see” trading mode can still be employed.
Trading execution and new order-entry strategies in practice
Regarding strategy, previously executed GBP 1.3250 long position was protected with a close at 1.3510, ultimately yielding a profit of 260 points.
The pound fell rapidly after hitting the protective stop, while the dollar generally rebounded. The dollar index may test resistance near 100.5. Then, depending on the overall market situation, we will judge whether to short the dollar again.
Previously, the Bitcoin pending orders were canceled due to price distance; if a rebound occurs later, we will look for an opportunity to attempt a short.
For new orders this week, we choose to attempt gold. Although precious metals remain weak, there may still be short-term swing opportunities and favorable risk-reward if they appear: place a limit buy order at 4280, with a stop loss below 4100, and a target at 4650.
$E-mini S&P 500 - main 2606(ESmain)$ $E-mini Dow Jones - main 2606(YMmain)$ $Micro E-mini Dow Jones - main 2606(MYMmain)$ $E-mini Nasdaq 100 - main 2606(NQmain)$ $Micro E-Mini Nasdaq 100 - main 2606(MNQmain)$ $Gold - main 2606(GCmain)$ $E-Micro Gold - main 2606(MGCmain)$ $1-Ounce Gold - main 2606(1OZmain)$ $E-mini Gold - main 2606(QOmain)$ $Silver - main 2607(SImain)$ $E-mini Silver - main 2607(QImain)$ $100-Ounce Silver - main 2607(SICmain)$ $Micro Silver Futures - main 2607(SILmain)$ $WTI Crude Oil - main 2607(CLmain)$ $Natural Gas - main 2606(NGmain)$
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