Macro Liquidity by Sunil Reddy

1/16 The Chart of the Century: Gold vs Dow For 100 years, the Gold/Dow ratio has traced an expanding triangle (ABCDE). We are now in Wave E — the terminal phase. ➡️ Elliott Wave target: • Gold $20,000–$25,000 base case • Silver $300–$500 (potentially >$1000 in mania) • Gold/Dow ratio aiming for 20x from here, possibly retesting Upper trendline or a bit throwover It seems unbelievable today. Bookmark this , in 10 years you’ll see how obvious it was. The reset decade has begun. #Gold #Dow #ElliottWave #Reset #Markets #Macro #ChartOfThecentury

Many people seem to think my post below is just a guess. It is not. This call is backed by multiple factors, and I have been consistently emphasizing the $3,800 level in gold for the last 3–4 months. You can go back and check my posts. I have been wrong about expecting an interim rally in silver from $65 toward $78, which did not materialize. Apart from that, I have remained bullish on oil and repeatedly called for oil to outperform both gold and silver. I have made multiple posts on the bullish setups in Oil/Gold and Silver/Oil ratios. I have very high conviction in my call for a gold bottom below $3,800. To be precise, my bottoming zone is $3,600–$3,800. I intend to make my biggest gold purchase below $3,800. When I do, I will post it here and pin that post to my timeline for years to come. I am putting my conviction on record. Time will judge the call.

Gold below $4,000 and silver below $50 will trigger the biggest shakeout and sentiment reset of this cycle. A huge wave of investors entered silver on the breakout from its 50-year cup-and-handle pattern. The long-term breakout structure will remain intact. But taking silver back below $50 would create enough doubt to make investors question the entire thesis. That is how weak hands get shaken out and liquidity is engineered. The biggest opportunities often emerge when a structurally bullish setup is made to look like a failed breakout. I believe that is the reset we are approaching in precious metals. The $3,800 zone will mark the bottom for gold, before the next major uptrend begins.

Britain was planning to raise fuel taxes to ease its fiscal crisis. Now the oil crisis is forcing it to do the opposite. Diesel prices have surged 41% since February. The government has now postponed planned fuel tax hikes until July 2027. They were counting on higher fuel tax revenue to ease fiscal pressure. Instead, they are being forced to delay it. And this is just the beginning. As oil prices continue rising, governments will eventually be forced to subsidise fuel, turning an expected source of tax revenue into an additional fiscal burden. Higher oil prices, weaker growth, falling fiscal flexibility and rising borrowing requirements. This is how an energy crisis turns into a sovereign debt crisis. Oil is the trigger.

Oil prices are gradually repricing higher while oil volatility continues to coil. Strikes on Iran appear imminent. The moment oil volatility starts breaking higher, expect the gradual repricing to turn vertical, triggering an aggressive short squeeze. The explosive phase of this move is still ahead of us.

Prediction markets are pricing a 95% probability that the Fed holds rates unchanged at today's FOMC meeting, with just a 5% chance of a 25 bps hike. But the odds flip sharply for the next FOMC meeting on December 9. Markets are pricing a 77% probability of a 25 bps hike, against just 20% for a pause. The market isn't pricing the end of monetary tightening. It's pricing a temporary pause before another rate hike.

The war is expanding, and so will the pressure on oil. Egypt has now authorised military support for Saudi Arabia as regional tensions escalate. Another major military power is being drawn into a conflict that already threatens some of the world's most critical energy shipping routes. The headlines are filled with peace talks, while an energy crisis is being engineered in the background. The longer this conflict expands, the greater the pressure on oil supply, shipping costs and insurance premiums. Markets are still focused on the possibility of peace while the conditions for a much larger energy shock continue to build.

Oil/S&P 500 ratio is Set for a major breakout in the daily chart. After breaking out against gold and silver, oil now looks ready to outperform equities too. The rounding structure is nearing completion, and a confirmed breakout will trigger a powerful move higher. I believe oil is very likely to outperform equities with significant force in the coming weeks. The relative strength rotation into oil is becoming increasingly difficult to ignore.

Japan is flashing a major sector rotation signal. Energy stocks are surging: Inpex +4.92% JGC Holdings +4.56% Mitsubishi Corp +4.28% Meanwhile, semiconductor stocks are getting hammered: Sumco -4.03% Kokusai Electric -3.86% Screen Holdings -3.78% Nikkei is down 0.43%, while the broader TOPIX is up 0.48%. But there is something much more important happening beneath the surface. This rotation is happening while bond yields have started cooling. When energy stocks outperform, oil prices rise, and bond yields begin falling, it raises an important possibility. The bond market is starting to price the growth damage from higher oil prices rather than just the inflationary impact. Higher energy costs squeeze corporate margins, weaken consumption, and eventually hurt economic activity. Normally, rising oil prices create inflationary pressure on yields. But when yields start declining despite stronger energy prices, it can suggest growth concerns are beginning to outweigh inflation fears. This is potentially an early sign of a stagflationary growth scare.

Middle Eastern equity markets are flashing warning signs. Saudi Arabia’s TASI fell 2.65% today, while Egypt’s EGX30 plunged 3.56%. Meanwhile, weekend markets are indicating that crude oil is set to open with a gap down of nearly 1% when Globex trading resumes. Gold and silver, on the other hand, are pointing towards mild gap-up openings. An interesting divergence is developing. Equities are facing significant selling pressure, whilecrude oil is indicating weakness at open. The actual futures opening will be important to watch. Are we heading into another week of broader risk-off sentiment?

BRENT CRUDE OIL IS NOW AT ITS FINAL DECISION POINT. If they cannot stop oil here, a parabolic run similar to the initial surge during the Iran war is very much on the cards. The market is once again approaching a critical breakout zone, but this time with a much tighter and more constructive structure. The next few sessions will be crucial. Price action here will likely determine whether the next major breakout happens before or after the US midterm elections. If Brent establishes acceptance here, the upside could accelerate very quickly. I have said this repeatedly: the oil market is not behaving like a market where the energy crisis has been resolved. We are approaching the point where the market will have to make its decision.

The last two weeks of market action can be described as a stagflationary growth scare. This is nowhere comparable to COVID And the most interesting signals are coming from the bond market. Look at what has happened across asset classes since October 8. US Treasury yields: 2Y: 4.75% → 4.65% (−10 bps) 10Y: 5.22% → 4.96% (−26 bps) 30Y: 5.60% → 5.29% (−31 bps) 10Y real yield: 2.87% → 2.64% (−23 bps) 10Y–2Y spread: 47 bps → 31 bps Energy: Brent crude: +8.5% WTI crude: +8.7% Equities: Nasdaq: −4.4% S&P 500: −1.3% Dow Jones: +3.2% Metals: Gold: approximately −2.2% Silver: approximately −7.5% Copper: approximately −2.6% Other markets: US high-yield credit spreads: 315 → 327 bps VIX: 15.41 → 19.03 Dollar Index: approximately −0.5% Now, what makes this interesting? Between October 8 and October 21, the 2-year Treasury yield actually increased from 4.75% to 4.81%, while the 10-year declined from 5.22% to 5.13%. The front end was holding firm while the long end was falling. This is important because the 2-year yield is closely tied to expectations for monetary policy, while the 10-year reflects longer-term growth, inflation expectations and term premiums. One possible interpretation is that the bond market is concerned about the economic damage caused by higher energy prices, even as inflation pressure limits the Fed's ability to ease monetary policy. The decline in real yields makes this development even more interesting. Normally, an inflationary shock can push long-term nominal yields higher. But when growth concerns and demand for duration begin dominating, long-term yields will fall even as oil continues rising. That is the contradiction we are beginning to see. Meanwhile, copper and silver are weakening, technology equities are under pressure, credit spreads have widened modestly, and volatility is increasing. These are not yet signs of systemic liquidation, but they are consistent with growing risk aversion across several markets. The difference between COVID and the current environment is important. During COVID, demand collapsed, oil prices crashed, and central banks had enormous room to respond with monetary and fiscal support. This time, the shock is coming from the supply side, particularly energy. Higher oil prices will simultaneously increase inflation, squeeze corporate margins, weaken consumer spending and damage economic growth. And unlike a conventional recessionary shock, the Fed cannot respond with aggressive easing without risking another inflation problem. That is what makes a stagflationary growth scare particularly difficult for financial markets. My concern is not that we are already witnessing another COVID-level event. We are nowhere near that. My concern is that the bond market is starting to price the longer-term consequences of an energy shock while other asset classes are only gradually adjusting. As oil continues rising, the yield curve keeps flattening, and credit spreads begin widening more aggressively, the pressure on leveraged positions will increase considerably. The real danger is not just higher oil prices. It is the possibility of weakening growth, persistent inflation and tightening financial conditions happening together. That is the combination I am watching very closely.

This man offers premium market research, focuses on commodities, and claims to be SEBI-registered. Yet he is promoting the idea that gold can be produced in a lab for just $279 per ounce. The world is frighteningly easy to fool. And look at the timing. This narrative is spreading precisely when gold is undergoing a major selloff. The psychological game is working. Throw out an absurd number, create fear among uninformed investors, and convince them to hand over their gold. There is a massive difference between producing gold atoms in a laboratory and producing gold economically on a commercial scale. People are falling for this nonsense without even questioning the basic economics.

Oil volatility has slowly started moving higher. Even though WTI has remained largely flat for the past 3 days, oil options are getting more expensive, suggesting the market is increasingly pricing in larger moves ahead. At the same time, liquidation pressure is building across metals and equities. We cannot say with certainty what is brewing behind the scenes, but these developments are increasingly pointing towards something bigger. My suspicion is that smart money is positioning for a major event, and oil is very much part of that equation. Price is still relatively calm, but volatility is beginning to tell a different story.

Something is seriously brewing beneath the surface of global markets. The Japanese yen is strengthening. The US dollar is strengthening. Nasdaq futures are down nearly 1.7%, and copper is crashing. This combination is increasingly pointing towards forced liquidation and a yen carry trade unwind happening in the background. Here is why. For years, investors borrowed cheap Japanese yen to fund leveraged positions across global equities, commodities and other risk assets. When these positions start unwinding, investors are forced to sell assets and buy back yen to repay their funding. This creates upward pressure on the yen while simultaneously putting selling pressure on global markets. At the same time, the US dollar also strengthen as investors scramble for dollar liquidity, collateral and margin requirements. That explains why both the yen and the dollar can rise together while equities and commodities are falling. Copper is particularly important here. As a proxy for global growth and a major beneficiary of the AI investment cycle, its sharp decline is another warning that leveraged risk positions may be coming under pressure. What concerns me most is that selling pressure is spreading across asset classes rather than remaining isolated. This is how a broader deleveraging cycle can develop. Falling asset prices trigger margin calls, forcing further selling, which creates even more liquidation pressure. None of these moves individually proves a carry trade unwind, but collectively they are increasingly consistent with one. As I warned earlier, copper was flashing a warning sign. Now the weakness is spreading. I suspect something much bigger is developing beneath the surface, and we may only understand the full extent of it after the damage is done.