empty
22.04.2025 01:07 AM
Panic hasn't gone anywhere – the dollar is being sold off, gold is rising, and the S&P 500 has turned downward again

The total speculative bearish position on the US dollar more than doubled over the reporting week, reaching -$10.1 billion. The Canadian dollar and the yen strengthened the most, while the euro's movement was slightly weaker—but in any case, it must be acknowledged: the dollar remains under heavy pressure.

This image is no longer relevant

Gold sets records almost daily, exceeding $3,400 per ounce—which is clearly not the limit. Even oil has resumed its growth despite the apparent shift toward safe-haven assets. This indicates that investors no longer view the US dollar as a safe haven.

Monday's sell-off was, as usual, triggered by the US President. In a Truth Social post, Trump called Federal Reserve Chair Jerome Powell a "major failure" and demanded an immediate start to rate cuts. According to Trump, inflation in the US has been virtually defeated, and any delay in rate cuts will lead to an economic slowdown—something he is trying to avoid at all costs. He must present the US as a reliable and attractive economy in his tariff war to stimulate capital inflows.

Moreover, Trump is reportedly considering firing Powell (whom he appointed himself) before the end of his term. This has sparked a new wave of sell-offs in US equity markets. The Fed doesn't want to rush. It has its plan and is sending signals intended to calm panic. Goolsbee stated that "short-term inflation expectations have increased, so we need to wait to see what happens next." At the same time, the yield on 5-year inflation-protected Treasury bonds (TIPS) has sharply declined in the past week—indicating the opposite trend.

The swap market has again priced in the possibility of four Fed rate cuts this year. Consequently, the dollar is losing support. Trump's plan to introduce new tariffs has not yet worked—China is refusing to make concessions and has even warned other countries against making deals with the US at their own expense.

It is unclear who will emerge as the winner—if there will be a winner. However, investors are buying gold instead of dollars, just in case.

Last week, we predicted that it wouldn't signal a reversal even if the S&P 500 rallied. On the contrary, it would be short-lived, as fundamental reasons continue to push the index downward.

This image is no longer relevant

And so it happened: the S&P 500, after a brief consolidation, once again headed south. The sell-offs are beginning to resemble panic again, and the 4,800 level no longer seems unreachable. Moreover, the long-term target has shifted to the 4,500 level. If a pullback occurs, it will likely be shallow—there are virtually no reasons to expect a sustained rebound.

Kuvat Raharjo,
Analytical expert of InstaTrade
© 2007-2025

Recommended Stories

XAU/USD. Analysis and Forecast

Gold is declining below the $3300 level today. U.S. PCE data met expectations. A shift in trade flows is helping the U.S. dollar regain positive momentum. This is also undermining

Irina Yanina 17:37 2025-05-30 UTC+2

Inflation Is Almost Under Control

While the euro continues to hold its ground against the dollar, European Central Bank (ECB) Governing Council member Fabio Panetta indicated during an interview today that inflation in the eurozone

Jakub Novak 13:40 2025-05-30 UTC+2

USD/CAD. Analysis and Forecast

The USD/CAD pair is attempting to regain positive momentum today, though traders remain cautious ahead of the key U.S. Personal Consumption Expenditures (PCE) Price Index release. As a preferred inflation

Irina Yanina 13:22 2025-05-30 UTC+2

EUR/USD. Analysis and Forecast

The EUR/USD pair continues to struggle to recover after rebounding from the 1.1200 level reached earlier, showing a moderately negative bias, although the decline remains limited. The U.S. dollar

Irina Yanina 13:19 2025-05-30 UTC+2

Legal Disputes Between Trump and Companies Over Tariffs Will Negatively Impact Markets (There Is a Likelihood of Continued Decline in Bitcoin and Litecoin Prices)

Global markets are significantly influenced by events occurring in the United States, where both political and economic spheres continue to swing like a pendulum. Earlier this week, after the U.S

Pati Gani 11:11 2025-05-30 UTC+2

More Time is Needed

Dallas Federal Reserve Bank President Lorie Logan indicated yesterday that it might take some time before policymakers understand how the economy will react to tariffs and other policy changes

Jakub Novak 10:53 2025-05-30 UTC+2

The ECB Should Not Delay Rate Cuts

While the euro is trying to regain its monthly highs after a fairly significant correction seen this week, a survey of several economists shows that the European Central Bank

Jakub Novak 10:49 2025-05-30 UTC+2

Markets Demand an Appeal

The S&P 500 started the day strong but ended on a downbeat note. Initially buoyed by the U.S. Court of International Trade's ruling that the White House's tariffs were illegal

Marek Petkovich 10:33 2025-05-30 UTC+2

What to Pay Attention to on May 30? A Breakdown of Fundamental Events for Beginners

Several macroeconomic reports are set to be released on Friday, but none are deemed particularly significant. In Germany, the inflation report for May will be released, with expectations

Paolo Greco 06:51 2025-05-30 UTC+2

GBP/USD Overview – May 30: Justice Has Prevailed, but for How Long?

The GBP/USD currency pair closed below the moving average line on Thursday, and the dollar strengthened for three consecutive days. However, everything changed in the second half

Paolo Greco 03:51 2025-05-30 UTC+2
Can't speak right now?
Ask your question in the chat.
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaTrade anyway.

We are sorry for any inconvenience caused by this message.