Gold and Silver prices are strong again this week with gold setting a new all time high of $5433 CAD currently back $58 to $5375.. Spot gold is up 2% in the past 5 days and up 10% in the past month. Silver is up 1.5% to $65.31CAD. US Dollar index DXY is flat at 97.91. SP500 Volatility Index VIX fell 1%. After SP 500 ES futures fell 1% last week (with a push to a new highs then), ES Futures again hit a new all time high this week of 6482 up 1.25% and currently trading only 5 handles below that point.
On Wednesday at 12:01am, the US federal government officially shut down for the first time in almost 6 years. President Trump has committed to capitalizing on the temporary stalemate and reorganising spending saying: “I can’t believe the Radical Left Democrats gave me this unprecedented opportunity… They are not stupid people, so maybe this is their way of wanting to, quietly and quickly, MAKE AMERICA GREAT AGAIN!”
On Wednesday, CNBC reported that the shutdown may have “cemented additional Fed interest rate cuts” going on to note that markets had priced in a 100% chance of an October cut and another 88% chance of a December cut. Notably, the data that governs Federal Reserve Decisions comes from the Federal Government, yet the Federal Reserve is independent of the Government and is capable of funding itself without Congress or the President.
The Supreme court ruled again that Fed Governor Lisa Cook can stay at her post. Trump had asked the Supreme Court to let him fire her on allegations of mortgage fraud based on her declaring two properties both as primary residences.
Crypto has come back with a vengeance with BTC up 9.5% this week to $120,400 USD less than $4,000 off of its all time high and ETH up 8.5% to $4526. S&P AeroSpace and Defense ETF XAR jumped 3.5% in the past 5 days to $238.10.
Pentagon rules have been updated to have nearly complete control of the Journalists who visit the facility. Last Week NBC reported “Journalists who cover the Defense Department at the Pentagon can no longer gather or report information, even if it is unclassified, unless it’s been authorized for release by the government, defense officials announced Friday. Reporters who don’t sign a statement agreeing to the new rules will have their press credentials revoked, officials said.”
The reason for Secretary of War Pete Hegseth’s mysterious emergency meeting last week was also made clear. The Secretary has set new goals to eliminate “beardos” and fat troops. His speech to 800 generals and admirals on Tuesday aimed to "restore a ruthless, dispassionate and common sense application of standards" to assess female fitness standards in combat roles and facial grooming. "The era of rampant and ridiculous shaving profiles is done… If troops want beards, then they can join special operations forces”
Weekly Jobless Claims reporting is suspended due to the government shutdown. The Gold/Silver ratio is up 0.75% to 82.04. Longer 20 yr and 30 yr US government bonds fell 8 and 5 bps to 4.66 and 4.75% respectively. Ai powered Government Contractor Palantir PLTR rose 4.5% this week, currently $187.05. With the first rate cut now in since Sept 17th FOMC; The probability of a total of only 25 bps in rate cuts in 2025 as priced by PolyMarket fell 4 pts to 4%, the probability of 50 bps in cuts fell 9pts to 19% and the probability of 75 bps in cuts rose 11pts to 68%. Short term rates are down 10bps in the 2yr at 3.65. US Comex Copper Futures HG, a leading indicator of economic growth, is up 19 cents to $4.96 usd/lb.