NVDA’s Signal for Stocks and Precious Metals

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Was that a top? Quite possibly. More importantly, even if it
wasn’t a top, it’s likely that we’ll get one soon
given what stocks are doing.

And in particular, what are the previous leaders doing. For now,
let’s take a look at the metals and miners.

They all moved lower today, and GDXJ even (temporarily) moved down by
over 2%. This is notable, but not yet groundbreaking. What is getting
groundbreaking is gold’s performance and its invalidation of the
move above $4,600.

Quoting my yesterday’s
Alert:

Gold stopped at its rising resistance line and it’s moving
back and forth around the $4,600 level – will it confirm the
breakout above $4,600 and $4,500?I think that an invalidation is still the likely outcomeas the dust seems to be settling after the recent attack on
Fed’s independence.

$4,600 failed. $4,500 is likely next.

Silver is also
down over 5%, however, silver didn’t invalidate a move above its
previous high. Technically, the white precious metal is still in a
stronger position.

Dollar Finds Support

Meanwhile, the USD Index reached a higher level of its rising support
lines, and it’s already moving back up. The uptrend remains
intact, and sooner rather than later, other markets will be influenced
by it.

As I wrote yesterday, this might happen to a greater extent when the
USDX holds above 100 – until that happens, most traders will
view the situation in the USD as unclear.

Still, the thing that I’d like to emphasize today is that if the
general stock market slides, the same is likely to happen with gold,
silver (temporarily, but still), and mining stocks.

On a stand-alone basis, the situation in stocks is just somewhat
problematic. Yes, the
S&P 500
invalidated its move above the 2025 high, but there were so many
attempts that we might as well see another one next week.

That’s not where the problem can be seen.

However, when we zoom out and check what’s happening with stocks
that used to be market leaders, it’s clear that a storm is
brewing.

Tesla first failed to
gold above
its 2024 high. Immediately after this invalidation, I wrote that this
was a powerful sell signal, and since that time, we saw another one
– a confirmed breakdown below the rising, dashed support line.

The latter is important because the first attempt to move below it was
invalidated and followed by a rally. Not this time. The breakdown is
fully confirmed, and Tesla looks ready to slide.

NVDA Stops Leading

While Tesla is important and it caught a lot of attention last year,
it’s even more important to check what’s happening with
NVDA – investors’ AI darling.

And the thing is that it’s no longer
outperforming.

Conversely, it’s lagging. It’s generally the case that
when leaders lag in any market, then this market is likely preparing
to decline. This is happening as early buyers exit based on stock
being overpriced, and at the same time, the general public investors
in other companies that are cheaper – hence other stocks
outperform temporarily.

That’s exactly what seems to be going on with stocks right now.

It’s not just theory, either. I marked two other cases when
NVDA’s top preceded the top in the S&P 500. The former was
already after its top while S&P moved higher. This didn’t
last, and big declines followed.

Now, this is important because if we’re going to get a bigger
slide in stocks, PMs and miners are likely to react. They reacted
significantly in 2008 and 2020 – especially silver and mining
stocks.

Now,
silver has multiple reasons to be resilient right now, but mining stocks can still slide profoundly. And
that’s exactly what I think is likely.

Thank you for reading today’s analysis – I appreciate that
you took the time to dig deeper and that you read the entire piece. If
you’d like to get more (and extra details not available to 99%
investors), I invite you to stay updated with our free analyses -
sign up for our free gold newsletter now.

Thank you.

Przemyslaw K. Radomski, CFA
Founder
Golden Meadow®

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