Sell Bitcoin at your peril.
A healthy gold shake out!
Central Banks Decide.
Gold finally gave in to a wave of profit taking last week, shedding around 7% in the week. I mentioned last week that when non-market people start talking about an asset that’s been dominating the headlines, it’s often the first sign that a correction is due. That is exactly what happened in the yellow metal. Mrs Lockwood suggested we buy Gold last weekend. Maybe she’s right, just a week too soon!
Silver followed suit, dropping more than 11% and ending a 9-week winning streak. Most of the financial press pinned the move on renewed optimism over the US-China trade talks, arguing that it took the shine off safe-haven assets. Personally, I think it was just classic herd behaviour.
The underlying reasons that pushed gold up more than 30% since the summer have not disappeared. Central banks are still net buyers, retail demand for physical gold is holding firm, and geopolitical risks are still bubbling away. Healthy bull trends always shake out the weak hands before continuing, and this looks no different. For me, gold is moving back into value territory, not losing its appeal.
The long-delayed US Consumer Price Index came in at 2.9%, a touch softer than expected but still well above the Fed’s 2% target. Stocks loved the news, with all the major indices setting fresh record highs.
The Fed meets this Wednesday, and the market is almost fully priced for a 25 basis point cut. Futures are already hinting at one more cut before year end. The dollar ended the week flat, showing that the easing story is already well understood.
Bitcoin was the big winner from the gold pullback. It posted a 5-day winning streak, helped along by the softer inflation data. Like it or not, Bitcoin has cemented itself as a legitimate asset class. Big institutions are paying attention. There’s even talk that JPMorgan could soon accept Bitcoin and possibly Ethereum as collateral for loans. If that happens, the crypto space could take off in a way we haven’t seen since 2022, when prices jumped 500% from 17,000 to over 100,000.
Sell Bitcoin at your Peril
Elsewhere, the Japanese Yen stayed under pressure as the new Prime Minister signalled support for continued easy policy. Any hopes of an imminent rate hike have been pushed further out. The British pound kept sliding after another round of weak labour market data, feeding speculation that the Bank of England will have to follow the global easing trend. The Canadian dollar, surprisingly, held firm despite President Trump’s renewed tariff tantrums, triggered by a Canadian ad that reminded viewers of Ronald Reagan’s dislike for tariffs.
This week is a major one for central banks. Alongside the Fed, we’ll hear from the European Central Bank, which is expected to leave rates unchanged. I will be streaming it live.
Normally, a Fed cut combined with a steady ECB stance would lift the euro, but markets are never that straightforward. Most of the expected policy news is already priced in, so traders will be focusing on forward guidance instead.
The Bank of Japan also announces its policy decision this week. Rates are likely to stay put, but rising inflation means their statement will be worth reading between the lines.
Trump is back in Asia, and markets will be watching every headline for signs of trade deals or new agreements, particularly with China.
As we always say inside PropIQ, don’t fight the trends. Pick your battles. I’ll be looking to buy dips rather than chase highs and continuing to build a long-term Bitcoin position. It’s about staying patient, staying focused, and trading what you see, not what you think.
Disclaimer
This market commentary is provided for educational and informational purposes only. It reflects the opinions of the author at the time of writing and should not be taken as financial or investment advice.
Funded Trading Plus operates evaluation and simulated funded programs, not live trading accounts. All references to trading, strategies, or market opportunities relate to simulated trading environments. Past market performance or individual trader results are not indicative of future outcomes.
About Andrew Lockwood
Andrew Lockwood is a seasoned professional trader with over 40 years of experience in financial markets. Starting his career on the floor of the London International Financial Futures Exchange (LIFFE) in the 1980s, Andrew has traded through multiple market cycles and volatility regimes. Today, he specialises in prop trading strategies, focusing on technical setups, risk management, and trader psychology. As the founder of PropIQ and a leading mentor, Andrew is dedicated to training the next generation of prop traders with proven, real-world trading methods.