Gold Breaks Out, Disturbing iPhone Decline, High Demand For Nvidia RTX 50, Amazon Offers DeepSeek

To gain an edge, this is what you need to know today.

Gold Breaks Out

Please click here for a chart of gold ETF SPDR Gold Trust (GLD).

Note the following:

• The chart shows gold is breaking out.
• By giving hundreds of millions of dollars to politicians, crypto lobbyists in the U.S. have succeeded at persuading a leading senator and advisors to the president to advocate that the U.S. government sell the gold stored at Fort Knox.  Central banks of countries such as China are buying gold.
• The chart shows unprecedentedly accurate calls by The Arora Report on gold.
  • As shown on the chart, when gold was in the $600 range, the Arora call was to back up the truck and buy gold.
  • As shown on the chart, on the exact day gold topped out in 2011, only hours before the top, The Arora Report call was to sell half of the gold holdings at $1904 with a stop on the remaining at $1757.  The chart shows the gold subsequently lost half of its value.
  • As shown on the chart in 2016, The Arora Report call was credited with the major drop in gold prices.  Business Standard which is like the Wall Street Journal of India wrote, “Arora report creates ripples in bullion market.”
• As full disclosure, gold is in The Arora Report’s ZYX Allocation Model Portfolio.
• The immediate trigger for a breakout was what we shared in yesterday’s Morning Capsule.  We wrote:

With quantitative tightening, the Bank of Japan (BOJ) has shrunk its balance sheet by $500B.  This move is causing the dollar to weaken.

• If the dollar drops, gold can fly.
• President Trump is threatening to impose 25% tariffs on Mexico and Canada tomorrow.  ETFs of interest are iShares MSCI Mexico ETF (EWW) and iShares MSCI Canada ETF (EWC).
• If Trump actually imposes the tariffs, it will help gold move higher.  On the other hand if Trump backs off, gold’s breakout may fail.
• The drop in iPhone sales is disturbing.  iPhone sales fell 11% in China.  Overall, iPhone revenues came at $69.1B vs. $71B consensus.  Apple Inc (AAPL) CEO did exactly what CEOs do when things go wrong – Apple declared that it had the best quarter ever.  A combination of Apple’s positive spin, a fear that sales could have been even worse, and extreme positive sentiment in the market is driving AAPL stock about 4% higher in the early trade.
• In addition to AI, gaming is still an important business for NVIDIA Corp (NVDA).  The demand for new RTX 50 series GPUs is unprecedented.  At many outlets, the entire RTX 50 series was sold out in minutes.
• Retail investors are extremely aggressively buying NVDA stock.
• Institutions who have been selling NVDA stock have stopped selling NVDA stock this morning after a report that Nvidia’s CEO Jensen Huang will meet with President Trump today at the White House.
• As full disclosure, a new signal on NVDA stock from The Arora Report is ahead.
• The U.S. government is investigating if DeepSeek improperly obtained Nvidia GPUs from Singapore.  How does Amazon.com, Inc. (AMZN) respond?  Amazon is now offering DeepSeek to its customers.  Yesterday, we shared with you that Microsoft Corp (MSFT) was starting to offer DeepSeek to its customers.  Even employees at the Pentagon appeared to have been downloading DeepSeek in large numbers before the practice was stopped.  The foregoing shortsighted behavior illustrates why it is so easy for China to keep on marching towards its goal of replacing the U.S. as the next superpower.
• PCE is the Fed’s favorite inflation gauge.  PCE data came inline with expectations.  Here are the details:
  • Headline PCE came at 0.3% vs. 0.3% consensus.
  • Core PCE came at 0.2% vs. 0.2% consensus.
• The U.S. economy is 70% consumer based.  For this reason, prudent investors pay attention to personal income and personal spending.  The data indicates that U.S. consumers continue to splurge.  Here are the details:
  • Personal spending came at 0.7% vs. 0.5% consensus.
  • Personal income came at 0.4% vs. 0.4% consensus.

Magnificent Seven Money Flows

In the early trade, money flows are positive in AAPL, AMZN, MSFT, Alphabet Inc Class C (GOOG), and Meta Platforms Inc (META).

In the early trade, money flows are negative in NVDA and Tesla Inc (TSLA).

In the early trade, money flows are positive in SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust Series 1 (QQQ).

Momo Crowd And Smart Money In Stocks

Investors can gain an edge by knowing money flows in SPY and QQQ.  Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil.  The most popular ETF for gold is SPDR Gold Trust (GLD).  The most popular ETF for silver is iShares Silver Trust (SLV).  The most popular ETF for oil is United States Oil ETF (USO).

Bitcoin

Bitcoin is range bound.

Protection Band And What To Do Now

It is important for investors to look ahead and not in the rearview mirror.  The proprietary protection band from The Arora Report is very popular.  The protection band puts all of the data, all of the indicators, all of the news, all of the crosscurrents, all of the models, and all of the analysis in an analytical framework that is easily actionable by investors.

Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider holding Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.

You can determine your protection bands by adding cash to hedges.  The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive.  If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.

A protection band of 0% would be very bullish and would indicate full investment with 0% in cash.  A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.

It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash.  When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks.  High beta stocks are the ones that move more than the market.

Traditional 60/40 Portfolio

Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.

Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less.  Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.

The Arora Report is known for its accurate calls. The Arora Report correctly called the big artificial intelligence rally before anyone else, the new bull market of 2023, the bear market of 2022, new stock market highs right after the virus low in 2020, the virus drop in 2020, the DJIA rally to 30,000 when it was trading at 16,000, the start of a mega bull market in 2009, and the financial crash of 2008. Please click here to sign up for a free forever Generate Wealth Newsletter.