March CPI was not a surprise and markets’ reactions to it are not so surprising either. Markets – especially those areas that became overbought recently – are pulling back with the theme being fear of a hawkish Fed.
Here is a daily chart view of GDX, pretty much doing what would be expected, given its overbought status. The situation is still normal, although it is not unique. One day I’ll want to see the sector as something more unique to a post-bubble environment, which we obviously have not yet entered.
Agree with your medium term outlook, maestro. We’ve been fooled a little the past year into believing that money was tight. But if money was really tight, would BTC be where it is today? Or the broader indices? Or credit spreads? Is Powell really a tough guy? Is he really a more forceful character than Volcker? And if not, is our current inflation problem smaller than back in the 70’s? Surely we need a correction (as you suggest) to refuel, but this could go on for a lot longer than most people think. Bart.
If silver continues to rally vs. gold its indication is that the market is losing confidence in the Fed, which as you say is not really as tight as the headlines think.