THURSDAY MARKET UPDATE

Gold surged 3.5% yesterday to $4,482 — and briefly touched $4,500. The FOMC minutes were hawkish. Many participants said higher rates would likely be necessary if inflation didn't fall. Then the Treasury dropped a bombshell: it doubled its buyback program. The dollar collapsed. Long-end yields fell. Gold erupted. The Fed said hike. The Treasury said print. Gold listened to the Treasury.

-Nathan Reed

2PM ET. WARSH SPEAKS. GOLD WAITS

Two things happened at 2pm yesterday. The FOMC minutes showed that “many participants assessed higher rates would likely be necessary if inflation did not fall”. Some said financial conditions might not be restrictive enough to reach the 2% target. The three dissenters argued that price pressures were broad-based and the Fed should adopt a more restrictive policy. The minutes were unambiguously hawkish. Gold should have dropped.

Instead, gold surged 3.5%. Because at the same moment, the US Treasury announced it would double its buyback program — purchasing its own bonds to suppress long-end yields. The dollar fell. Long-dated yields dropped. And gold erupted to $4,482, briefly touching $4,500. The message was clear: the Fed wants to hike. The Treasury is monetizing debt. When fiscal and monetary policy contradict each other this openly, gold is the only honest asset in the room.

Warsh also revealed he wants to reduce FOMC meetings from eight to six per year — “allowing more information to accumulate between meetings”. That's significant. Fewer meetings means fewer opportunities to hike. It slows the tightening timeline even if the intent is hawkish. The new Chair is buying time. And in this market, time is gold's best friend.

WALMART, DEERE, AND PHILLY FED. TRIPLE EARNINGS THURSDAY

Walmart reports this morning — the consumer inflation barometer. If Walmart is raising prices, August CPI re-accelerates. If it's absorbing tariff costs, margins compress but inflation cools.

Deere reports alongside it — the farm economy + reshoring + infrastructure spending proxy. The Philly Fed Manufacturing Index drops at 8:30am. Weekly jobless claims alongside it. By noon we'll have the consumer, the manufacturer, and the regional Fed all in the same morning.

Gold at $4,490 is now testing the 200-day SMA from above for the first time since the January correction. The technical picture has flipped: what was resistance is now becoming support.

If gold holds above $4,450 through Friday, the breakout is confirmed and $4,600 becomes the next target heading into Jackson Hole. Preliminary August PMI tomorrow is the last data point before Warsh speaks. The final piece of the puzzle.

What to watch:

Today: Walmart + Deere earnings, Philly Fed, jobless claims. Tomorrow: preliminary Aug PMI. Aug 27: Jackson Hole. Late Aug: Nvidia.

“The Fed said higher rates may be necessary. One hour later, the Treasury announced it would buy its own bonds. Read that again. The central bank is warning about inflation. The fiscal authority is printing to buy debt. When the two halves of government contradict each other this openly, gold is the trade. It's not about whether the Fed hikes. It's about whether the system is coherent. Yesterday it wasn't. Gold noticed”

WALMART, DEERE, ALIBABA

Walmart  $WMT ( ▼ 9.3% ) — consumer inflation proxy; if Walmart is passing tariffs through to consumers, August CPI accelerates; if it's absorbing them, margins compress.

Deere  $DE ( ▲ 4.02% ) — farm economy + infrastructure spending + tariff passthrough on agricultural equipment; the real economy read.

Alibaba  $BABA ( ▼ 2.25% ) — Chinese consumer + AI cloud; the first post-China-gold-buying earnings; does China's tech rally match its gold rally?

iShares Treasury Bond ETF  $TLT ( ▼ 0.68% ) — Treasury buyback announcement lifted bond prices; the long end rallied after weeks of selling; TLT bounced off 52W lows.

Newmont  $NEM ( ▲ 1.0% ) — world's largest gold miner surging with spot; $4,490 gold = record operating margins; miners finally capturing the metal's upside.

For real-time data, I recommend monitoring Finviz.

GOLD | Gold touched $4,500 — the 200-day SMA that rejected it twice last week; this time it broke through intraday before settling at $4,482; the resistance is cracking.

FED | FOMC minutes: “many” wanted higher rates — broader hawkish sentiment than the 3 dissenters; the WGC was right to warn; September is still alive.

FISCAL | Treasury doubled buyback program — the government is buying its own debt with freshly created money; long-end yields fell; dollar collapsed; structurally bullish for gold.

POLICY | Warsh: 6 meetings per year — reducing from 8 means fewer hike opportunities; slows the tightening cycle even if the intent is hawkish; time is gold's friend.

CALENDAR | Jackson Hole: 7 days — Warsh's first keynote; now arrives after hawkish minutes + dovish buyback; his speech must reconcile the contradiction.

Walmart this morning. Philly Fed at 8:30. Jobless claims at 8:30. Gold at $4,490. $4,500 broken. Jackson Hole in 7 days. The Fed says hike. The Treasury says print. Warsh has to choose.

Nathan Reed | Profits & Insights