Bitcoin and Gold Surge as Treasury Yields Defy Government Intervention

The S&P 500 Index (SPX) gained about 0.4% Friday, but still finished the week lower as money rotated aggressively into gold, Bitcoin, crypto, and mining stocks. The bigger issue is that Treasury yields remain elevated despite government efforts to push longer-term borrowing costs down, creating a strange environment where risk assets are rallying even while the bond market continues flashing pressure.

The United States 10 Year Treasury Yield (US10Y) closed around 4.73%, near its recent highs, even after the government announced purchases of longer-dated Treasury bonds. The strategy is essentially to issue or sell shorter-dated debt and use that money to buy longer-dated bonds to bring down the 10-year and 30-year yields. So far, the roughly $4 billion in announced purchases has not produced the intended result.

Normally, yields moving this high would create more pressure on stocks, but Friday was different. Late August trading volume was light, institutional participation was reduced, and the huge moves in Bitcoin, crypto, gold, and miners created a broader risk-on atmosphere.

The S&P 500 remains below an important resistance trend line. If it rallies next week, approximately 7,850 is the level to watch. On the downside, the index remains above the upper boundary of the long-term parallel channel extending back to the 2020 lows and the 2021 bull market high. It is also still above the pivot separating a positive short term bias from a negative one, so the broader trend remains positive for now.

The U.S. Dollar Index (DXY) also broke below a major trend line this week. A short-term bounce is possible, but the larger technical structure points toward additional weakness over the next several weeks to a month.

Gold (XAU) was one of the strongest assets this week and gained another 2%, or almost $100, Friday. The breakout from its descending wedge has been powerful, but gold is now approaching resistance around $4,660 to $4,700. That does not mean the rally has to stop, but after a move this strong, that is the next area where I would expect buyers and sellers to fight for control.

The VanEck Gold Miners ETF (GDX) has run almost 50% in roughly one month. It pushed through its 0.618 Fibonacci level and reached resistance around a previous gap fill and pivot high, so a normal pullback after a move of that size would not be surprising.

Silver (XAG) also broke out of its descending wedge, although it has not moved as aggressively as gold. The next resistance area is around $71 to $71.50. If silver reaches that zone, that becomes the next important battle between buyers and sellers.

West Texas Intermediate Crude Oil (USOIL) moved higher Friday, but I am still not convinced that oil has confirmed a larger breakout. A stronger move may require a meaningful military reescalation between the United States and Iran rather than political rhetoric or economic pressure. Natural gas was basically flat, and while the price action is becoming somewhat more constructive, there has not been a confirmed bullish shift yet.

Technology was not where the strongest money was flowing. SanDisk Corporation (SNDK) fell about 0.25%, while Apple Inc. (AAPL) and Amazon.com, Inc. (AMZN) also declined. The bigger technology event comes Wednesday after the closing bell when NVIDIA Corporation (NVDA) reports earnings. That report could either bring money back into technology and the artificial intelligence trade or create additional pressure if the results disappoint.

Now Bitcoin (BTC) is where things get especially interesting. Bitcoin gained approximately 25% in just one week, one of its strongest weekly moves in years, while some altcoins moved 20%, 30%, 40%, or even 50%.

But after a move that large, I would not chase it here. Bitcoin reached an important resistance trend line just below $80,000. A roughly 50% retracement of the recent move would bring Bitcoin back toward approximately $70,000 to $71,000. If Bitcoin instead breaks through $79.500, the next major resistance is around $82,000.

Robinhood Markets, Inc. (HOOD) also reflected the crypto enthusiasm, gaining more than 13% and approaching 14% Friday.

So next week, I am watching the bond market first, then PCE inflation data and NVIDIA earnings. Gold is testing $4,660 to $4,700, silver is approaching $71 to $71.50, and Bitcoin is testing resistance just below $80,000. After moves this large, patience and price discipline matter more than chasing momentum.