We are seeing a historic short squeeze in the stock market, and inflation may soar above 10% as precious metals surge but gold awaits key upside breakout.

Inflation
April 14 (King World News) – Peter Schiff:  Despite the March PPI rising less than expected, it still rose 0.5%. YoY prices rose 4%, the biggest gain in more than three years. More importantly, the trend from here will be up. In 2026, the PPI will rise more than the 6.2% jump in 2022 and may surpass the 10% surge in 2021.

After trading above 100 last week, the U.S. Dollar Index is now below 98, hitting its lowest level since March 1, when the war began. That means the dollar has already lost all of its safe-haven gains. As the dollar falls, U.S. consumer prices and interest rates will rise.

Historic Short Squeeze
The Kobeissi Letter:  We are witnessing a historic short squeeze right now.

The S&P 500 has now added nearly +$6 TRILLION in market cap since March 30th.

In just 5 trading days, hedge fund short exposure to US ETFs has gone from the highest since May 2025 to lower than 97% of cases over the last 5 years.

Meanwhile, the capital that was sidelined amid the Iran War is quickly rotating back into AI stocks.

The reality is that AI names have only gotten bigger amid the volatility of the Iran War.

Stocks like Nvidia and Apple were nearly half as cheap as Costco and Walmart on a Forward P/E basis after the recent correction.

All while 4% inflation is back and investors are searching for any source of yield as a hedge.

Record highs are on the horizon…

Listen to the greatest Egon von Greyerz audio interview ever
by CLICKING HERE OR ON THE IMAGE BELOW.

Precious Metals Surge But Gold Awaits Key Upside Breakout
Ole Hansen, Head of Commodity Strategy at SaxoBank:  Gold has in the last week settled into a wide USD 250 range, currently approaching the upper end with resistance sighted near USD 4,850. The move reflects a gradual stabilisation following last month’s liquidity-driven sell-off, where a combination of rising yields, a stronger dollar and forced deleveraging weighed heavily on prices.

More recently, the macro backdrop has turned incrementally more supportive. Fed funds futures have once again begun to price in rate cuts, while both the US dollar and real yields have drifted lower. This shift has helped gold recover, but not yet enough to deliver a clear directional signal. For now, price action remains contained, with key resistance still located near USD 4,850, the 50% retracement of the 1,500-dollar correction that unfolded between late January until the through on 23 March. A sustained break above this level would likely be required to trigger renewed momentum and systematic buying from trend-following strategies.

Silver
Silver has participated in the recovery, climbing back towards USD 80 after bottoming near USD 61 on 23 March. While gold’s rebound has been primarily macro-driven, silver has enjoyed additional support from its industrial linkage. The recent improvement in copper and broader industrial metals, partly driven by reduced growth concerns as geopolitical tensions show tentative signs of easing, has provided an extra tailwind.

That said, from a structural perspective, silver remains in a rebuilding phase. The sharp correction seen during the March liquidity and inflation shock exposed how sensitive the metal is to shifts in both macro conditions and industrial demand expectations. While the rebound is notable, further gains are needed before confidence can be considered fully restored.

Positioning continues to play an important role. Hedge funds have reduced their net long gold futures position to a 25-month low in the latest reporting week to 7 April. The last time positioning was this light, gold traded near USD 2,000/oz, highlighting the scale of the recent reduction in exposure. Profit-taking following a strong multi-month rally, combined with elevated volatility and uncertainty around the Federal Reserve’s next move, contributed to this sharp decline in participation.

From a forward-looking perspective, however, this leaves the market in a less crowded state. Lean positioning reduces the risk of further long liquidation and instead creates scope for renewed buying should the technical outlook improve and macro conditions remain supportive.

As with most markets, developments in the Middle East continue to act as a key macro driver. While heightened tensions initially supported safe-haven demand, the recent stabilisation has shifted the focus. A potential de-escalation could ultimately prove supportive for precious metals if it leads to a weaker dollar and a renewed focus on underlying US fundamentals.

These include persistent concerns around growth and fiscal sustainability, both of which have been exacerbated by the recent conflict. Increased debt issuance alongside higher input costs risks weighing on investment, compressing margins and eroding consumer demand—factors that may, over time, reinforce the case for lower real yields and a more supportive environment for gold.

In the near term, gold remains firmly range-bound, while silver continues its recovery alongside improving industrial sentiment. However, the underlying backdrop has shifted in a more constructive direction. Lower real yields, a softer dollar, renewed rate-cut expectations and very light speculative positioning collectively point towards a market that is rebuilding rather than breaking down.

The absence of a breakout signal for now suggests patience is required. However, the longer this consolidation persists, the greater the likelihood that the eventual move will resolve higher, particularly if macro tailwinds continue to strengthen.

Key points:

  • Gold remains range-bound, with USD 4,850 acting as key resistance for a breakout.
  • Silver rebounds sharply, supported by both macro easing and improved industrial sentiment.
  • Lean hedge fund positioning leaves room for renewed buying once the technical and/or fundamental backdrop strengthen
  • Lower yields, a softer dollar and rate cut expectations are rebuilding support, allowing investors to return their attention to long-held underlying drivers

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