Proflex Market Update - Wk 12
Welcome to another weekly update from Proflex!
Market Recap: Signs of Stability After Recent Turmoil
Last week, markets took a tentative step towards stability. After a period of intense volatility and steep corrections, inflation data came in better than expected, providing some much-needed relief. The earlier panic about tariffs and trade wars has also started to settle down, with no new surprises shaking the markets.
As we’ve discussed repeatedly in our WhatsApp community calls and weekly updates, market trends are shaped more by technical price action than short-term headlines. The correction we witnessed was deeper than we anticipated, but it was largely due to frothy valuations and overbought conditions that were ripe for a pullback—irrespective of the news cycle.
The good news? The oversold conditions have now built a solid base for potential recovery. And today’s market open with strong follow-up buying could mark the beginning of a positive trend this week.
We discussed market conditions and economic policy impact in our weekly call last Friday.
What’s Coming This Week? Key Focus: FOMC Meeting
The highlight of the week will be the FOMC meeting and press release on Wednesday. And this isn’t just any meeting—it’s one of the four key meetings where the Fed releases the “dot plot”, providing insight into how voting members project interest rates over the medium to long term.
• Bond Yields Are Down: Recent dips in yields indicate the market is leaning towards a dovish outlook.
• Market Expectation: We expect to see Fed governors lowering rate projections—a potential catalyst for market gains.
• Impact of Tariff Concerns: Inflation fears linked to tariffs are still holding back consumer sentiment. However, actual inflation data shows a cooling trend.
The big question is: Will the Fed focus on real-time data or projected tariff-related inflation?
• Remember, tariffs can always be renegotiated and could trend down in the future.
• If the Fed emphasizes current data, it could provide the market with the boost it’s looking for.
Gold, Silver & Metals Rally
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Gold soared to new highs last week, hitting the $3,000 mark, and the rally shows no sign of slowing. We’re also seeing:
• China’s stimulus beginning to take effect, driving up prices of metals like copper and silver.
• A renewed risk-on environment supported by fiscal stimulus and money supply growth.
• EU’s increased spending alongside the US’s rising M2 money supply—adding to the macro tailwinds.
This is why we’ve been consistently bullish on precious metals since last year and our subscribers have benefitted greatly from these trends. There is no change in direction visible as far as gold rush of this decade is concerned.
🚀 Outlook: Can Markets Build a Base?
Markets have been trying to form a base after a painful correction, but it’s been a bumpy ride. The FOMC’s announcement could be a crucial trigger this week. If the Fed shows a dovish tilt in their dot plot, it could mark a turning point for broader markets.
However, tariff uncertainty still looms, and consumer sentiment remains cautious. But with strong fundamentals in metals, easing inflation data, and the possibility of positive Fed commentary, we see room for a constructive recovery.
Stay tuned for more updates, and as always, we’ll keep helping you navigate the noise and focus on actionable insights.
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Best regards,
Raman Bindlish
Editor-in-Chief,
Proflex Finance
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