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Gold traders are kept busy as gold surges on banking stress and a weakening dollar. The yellow metal is seeing persistent dip buying behavior as traders adopt the view that demand above $2000/oz will remain strong amid banking stress and overall strong investor demand, including buying by central banks globally. Will gold finally break lower or have we entered new normal where gold remains above $2k/oz? 

Markets have had a good run so far this year, led by tech giants. Markets have cheered the enormous cost-cutting initiatives amongst tech giants and pivot to a focus on profitability. Monday marked the lowest volume for the S&P 500, as investors await to see the results of Microsoft and Alphabet in after-hours on Tuesday. Tech typically leads the market (higher or lower), so investors are waiting to see where is tech headed next. Going into this earnings there are 3 important elements: (1). 75% of firms are beating earnings so far (positive).  (2). Bearish positioning in S&P 500 futures is enormous (positive). (3). Volatility has come down by a lot (Some will say this is positive suggesting a bull market, but it also means it leaves markets more vulnerable (slightly negative).

We are having the most stress in US financial conditions since late September. Financial stocks have lost $465bn in market value, per Bloomberg. Historically speaking, this has shown to be a good time to buy stocks, given a long-term time horizon.

The focus of the week will be PMIs for US, Europe, UK, and China. Inflation data, with CPI for Europe, and Japan will also be important. The week is also busy with earnings from Salesforce, Broadcom, Costco, AMC, and #tesla analyst meeting Wednesday.

The median short interest for members of the S&P500 suggests that not many market participants are betting against the current rally. Shares out on loan stands just <1% of the benchmark’s median free float as of Jan. 31, according to S&P Global Market Intelligence.