Gold, bitcoin, robots

Gold trade update

Friday, I sent out a bullish gold recommendation, and the timing was either horrible, or excellent. I sent my bullish view at 9:57 a.m. and the IEEPA ruling came out at 10:00 a.m. Gold collapsed on the IEEPA ruling but didn’t stay down for long.

I suppose the market interpreted the Supreme Court ruling as “yay, checks and balances!” but I am not sure. The Supreme Court ruling against the tariffs was a heavy favorite and was just about fully priced in. There was no real reason for any stock or security to move much after the ruling.

Even the most tariff-sensitive stocks like Restoration Hardware (RH, heavy importer of tariffed goods) went up 10% and back down 10% within a few hours. Tariffs don’t matter like they used to. The market is logically saying “We thought tariffs were a big deal but now that we have a year of data to look at, there’s not much evidence that tariffs matter for macro much at all. They’re a signal of policy uncertainty, but not a real macro driver.” An entertaining circus, but not much economic impact.

The past 48 hours have driven a few more nails in the coffin of the “bitcoin is digital gold” narrative. The two assets are going in exact opposite directions as the US government continues to move military equipment into position around Iran and the President keeps the fun going with the random global tariffs wheel. It stopped on 10% Friday, then landed on 15% Saturday.

Again, I am not sure any of this tariff stuff is more than noise at this point. There are so many layers of complexity and so little credibility to any of the policies given how often it all changes. It’s just a new permanent tax and another layer of federal bureaucracy for business to wade through at this point, and everyone is kind of used to it. But the price action since Friday a.m. again speaks to analog over digital. That of course, is a theme across all tech—atoms over electrons—and so bitcoin isn’t the only digital-world asset feeling the pain. IGV vs. XLE looks a lot like BTC vs. XAU, these days, for example.

It’s a big night tonight for markets as both Japan and China return from holiday. I will be keen to see if retail and/or central banks buy gold. If you went long futures on my idea Friday, you could move the stop loss up to the entry point now—the demand is either going to be there, or it isn’t. If we get back below 5070 or so, that’s a massive red flag and probably tells you that the U.S. retail demand (driven by tax refunds) and the Asian retail and institutional demand (driven by a return from holiday) is not as strong as I had predicted.

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Calendar

Below is this week’s calendar. NVDA Wednesday is a possible highlight, though I would point out that realized vol in Nvidia is much lower now given its enormous market cap. Wednesday should be a buy USD day for corporate month-end.

Note how NVDA realized volatility has been extremely low as the stock has been range trading since mid-2025.

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Here come the robots (again)

The Twittersphere, tech founders, and many economists are increasingly vocal about the coming jobs apocalypse triggered by AI. For example (HT Tim P): Can advanced AI lead to negative GDP growth? There is a strong air of bigger picture deflationary angst out there, with Citrini’s viral scifi post and many others. I guess my first instinct is to view this as yet another panic over automation, like we’ve seen over and over for the past 200 years or so, but it’s also easy to see why this time is different. While everyone in the current day will say “AI is nothing like all those other panics!” the people panicking about robotic auto plant automation in the 1980s were saying “This is nothing like the assembly line panic of the 1920s!” Humans have a funny way of adapting when doom is on the horizon.

Robots have been about to take all the jobs for at least 100 years.

1980s and 1990s

1920s

Anyway. I’m not going to sit here and say everything is fine. In fact, the more important takeaway from the huge surge in AI worries is that monetary policy going forward will probably be looser as there will be plenty of academics that buy into the idea that AI is deflationary. This is part of the reason bonds are so well bid already right now. The market is starting to price in lower prices for services and weaker employment demand, as depicted at the start of the “Advanced AI…” piece I linked above.

Quite a lot of AI roads lead to lower inflation and weaker demand for jobs. That should be a macro tailwind for bonds as long as we keep seeing the narrative at max volume in the mainstream press and on Twitter, Substack, etc. Whether the future reality is different doesn’t matter right now. “AI is deflationary” is the narrative that is in control right now.

The Positioning Report and large expiries are below.

I hope you are a main character, not just an extra today.

Number of movies passing 1, 2, or 3 conditions of the Bechdel Test

To pass The Bechdel Test a movie must:
(1) have at least two women in it, who (2) talk to each other, about (3) something besides a man.

https://bechdeltest.com/

 

HT Adam

good luck ⇅ be nimble