The consensus remains bullish on inflationary expectations, including precious metals, stocks and oil. But then, recency bias is the typical human response. It’s worth considering that cycle peaks could be behind us.

Gold pared dramatic losses as US President Donald Trump postponed military strikes against Iranian energy infrastructure for a five-day period after what he described as productive talks toward ending hostilities. Oil also fell sharply, posting one of the biggest intraday price swings on record, after President Donald Trump posptoned strikes on Iranian power plants and said his team held discussions about ending the conflict, though Tehran denied any such dialog. Bloomberg’s Mike McGlone joins to discuss on Bloomberg Intelligence. Here is a direct video link.

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As prices fall, leveraged participants necessitate selling across all assets to pay down margin debt (shown in red below since 1995, with the S&P 500 price in black).

Longer-term support tests remain far below current levels (S&P 500 shown below since the end of 2019, courtesy of Bespoke). Food for thought when reviewing one’s risk-management plans and assumptions. Most people have no idea that current stock valuation extremes mean prices can halve and remain within a secular uptrend.