Key Points
- Gold is testing resistance at $4,250 per ounce.
- Copper (COMEX September futures) jumped to $6.72/lb.
- US Treasury intervention in the Japanese Yen has rattled bond market investors.
- The ISM Services PMI signals expansion, but signals weak job growth and strong inflationary pressures.
Gold rallied to test resistance at $4,250 per ounce. A breakout would signal another test of $5,000.
Copper jumped to $6.72/lb on the COMEX futures exchange (Sep’26), continuing its long-term uptrend.
The Dollar softened after last week’s joint intervention by Japan’s Ministry of Finance (MoF) and the US Treasury to support the Yen. Bond market traders are questioning why the US Treasury was involved and not the G7. Coordinated action by G7 central banks has supported past interventions. This time, the G7 were not involved, and the conclusion is that the US Treasury was acting to protect its Treasury market. The US Treasury repo operations circumvented the MoF being forced to sell US Treasuries to support the Yen, a move that would have driven up yields. (Reuters)
Stocks & Financial Markets
Bitcoin1 continues to consolidate in a narrow range above 60000, a bearish sign in a downtrend. A breakout above 65000 would signal that financial market risk aversion is easing, while a break below 60000 would warn of a major liquidity contraction.
Dow Jones Industrial Average broke out above 53000, and is headed for a test of 55000. Trend Index troughs above the zero line confirm buying pressure.
ISM Services
The ISM Services PMI increased to 54.1% for July, signaling a broad economic expansion.
However, the Employment index fell to 47.4%, warning of weak job growth ahead.
Services Prices also increased to 70.3%, a level similar to Manufacturing, signaling strong inflationary pressures.
Conclusion
US Treasury operations to assist Japan’s intervention in support of the Yen underscore the fragility of US Treasury markets. The move fueled a rally in Gold and Copper, as well as the Dow, as confidence in US Treasury markets was shaken.
The ISM Services PMI signals continued expansion, but warns of weak job growth and strong inflationary pressures.
Acknowledgments
- CoinDesk: Bitcoin
- CNBC: Comex Copper Futures (Sep’26)
- Reuters: US-Japan action undercuts G7’s historic FX role
- Institute for Supply Management: ISM Report on Business
Notes
- Cryptocurrencies are the highest-risk asset class, and we analyze Bitcoin (BTC) solely to identify risk sentiment in financial markets. Our analysis is not a recommendation to buy or sell BTC, nor is it a commentary on the merits of cryptocurrency.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.