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Trump reinstated the Hormuz blockade, sending oil higher and rate-hike bets up, reversing the peace trade that helped bitcoin recover in early July. Today's inflation print is the next test.
(Kitco News) – Gold’s recent price decline reveals an important paradox: a stronger U.S. dollar can pressure gold prices in the short term while ultimately strengthening gold's long-term investment case, according to Paul Wong, managing partner and market strategist at Sprott Inc.In his latest in-depth monthly analysis of the gold market, Wong pointed out that spot gold lost $532.24 per ounce in June – nearly 12% – to finish the month at $4,008 for its fourth consecutive monthly loss. “June’s monthly decline was the largest since October 2008,” he noted. “For the quarter ended June 30, gold fell by $660.04, or -14.14%, the worst quarter since the second quarter of 2013, which is when the Federal Reserve (Fed) began its first rate-hiking cycle after the 2008 Global Financial Crisis.”Wong said gold's latest and deepest monthly correction pushed market sentiment into extreme bearish territory.“The June selling wave in gold began with the signing of the Islamabad Memorandum of Understanding between the U.S. and Iran, which sent oil prices plummeting and the U.S. dollar rising,” he said. “The second selling wave was catalyzed by the market’s hawkish interpretation of new Fed Chair Kevin Warsh's remarks after the June meeting of the Federal Open Market Committee (FOMC). This was Warsh’s first FOMC meeting as Fed chair.”Wong said that rising rate hike expectations drove short-end yields higher, which served to further strengthen the U.S. dollar. “Most quant traders would have interpreted a U.S. dollar breakout combined with rising short-term rates as bearish for gold.”“Investment funds sold gold in the March to May period to unwind extremely leveraged positions,” he noted. “They continued selling during June as macro readings worsened and sovereign-related entities pulled back on gold buying. It was commodity trading advisors, quant and algo-type funds that predominantly drove the waterfall declines in June as they sold further or entered modest short positions.”“The drop in gold prices appears to be much more significant than the actual moves in the U.S. dollar and federal funds rates,” he added. “It suggests that much of the potential negative effects of a higher-rate, stronger-dollar combination have already been discounted.”Wong wrote that gold’s decline in the first half of 2026 matches previous periods of extreme bearish sentiment. “In June, gold fell below its 200-day moving average for the first time since October 2023 (see Figure 1) and has now reached extreme oversold levels,” he said. “Over the past decade, gold has tended to find support when prices fall to 90% of its 200-day moving average (Figure 1, lower panel). The drawdown has reached -26% (Figure 1, middle panel), the largest drawdown in a decade since the lows of 2016.”Meanwhile, the U.S. Dollar Index has increased by 2.91% year-to-date, while U.S. two-year Treasury yields have risen by 70 basis points year-to-date. “At the beginning of the year, fed funds futures were pricing in 2.3 rate cuts for the remainder of 2026,” Wong noted. “This has now shifted to 1.5 rate hikes due to the change in inflation expectations.”Wong said the emerging policy conflict at the Fed is one of the most significant narratives for markets.“One of the biggest questions facing markets today is whether Fed Chair Kevin Warsh is a hawk or a pragmatist,” he wrote. “Will he prioritize inflation control or accommodate the political and market pressures for lower interest rates? Warsh inherited an economy that remains surprisingly resilient. Labor markets are strong, growth is solid, asset prices are elevated, and inflation is still running well above the Fed’s 2% target. Simultaneously, President Trump has repeatedly called for lower rates. There is a tension between economic realities and political expectations.”Wong noted that the debate is now shifting from the expectation of rate cuts to potential rate hikes.“Warsh's inherited problem is that inflation never really died,” he said. “The economy has refused to slow, job openings remain elevated, payroll growth has surprised to the upside, consumer spending is healthy, and manufacturing and services activity continue to expand. Meanwhile, inflation remains sticky. Core PCE inflation8 is running around 3.3–3.4%, headline CPI inflation remains above 4%, and services inflation continues to prove difficult to tame.”“The AI buildout is also creating new inflationary pressures as memory shortages and rising component costs feed into consumer prices,” he added. “Investors are increasingly concerned that inflation may be more persistent than policymakers and markets expected.”But despite this persistent inflation, investors seem to doubt that Warsh will be genuinely hawkish on monetary policy. “Many continue to believe in the ‘Fed put,’ the idea that significant market weakness would eventually force policymakers to reverse course and lower rates,” Wong said. “Trump’s preferred outcome appears straightforward: lower rates, strong growth, rising equity markets and continued investment. The challenge is that the current economic backdrop does not clearly justify an easier policy. Warsh, therefore, finds himself caught between political demands for easier money and economic data that may argue for tighter policy. Maintaining Fed independence while navigating those pressures could prove challenging.”“The rising tension between inflation, politics and central bank credibility creates an environment that has historically supported gold,” Wong said. “Ultimately, the question is whether the Fed remains willing and able to prioritize price stability over political and market pressures. The answer to this question may prove far more important for gold than the precise path of interest rates over the next few quarters.”Wong also updated his analysis of another key market narrative: The cyclical strength of the U.S. dollar within a broader secular decline.“For years, we have maintained the view that the U.S. dollar is in long-term decline, not necessarily in exchange-rate terms, but in its purchasing power and role as the dominant store of monetary value,” he wrote. “Massive fiscal deficits, a rising debt burden, persistent monetary expansion, accelerating central bank gold purchases and increasing geopolitical fragmentation all point toward the gradual erosion of the U.S. dollar-centric system.”But the reality, Wong said, is more nuanced. “Despite repeated predictions of its demise, the dollar continues to stage powerful rallies periodically,” he said. “These rallies put pressure on commodities, precious metals, emerging markets and risk assets.”“Gold may be in a secular bull market, but it has also experienced sharp corrections alongside silver, copper, oil and other hard assets,” he warned. “A weakening monetary regime doesn't prevent powerful U.S. dollar rallies.”In order to understand this seeming contradiction, investors must separate two forces that are often lumped together.“The dollar remains structurally indispensable to global financial system settlements even as its long-term role as a monetary reserve slowly erodes,” Wong said. “In other words, the dollar may be experiencing secular decline, but it can still have powerful cyclical periods of strength for many years.”And every big U.S. dollar rally creates economic and financial stress for the rest of the world. “A stronger dollar increases debt-servicing costs for foreign borrowers, tightens global liquidity, raises funding costs and often forces traders to unwind leveraged positions and carry trades,” he said. “At the same time, dollar strength encourages central banks to diversify reserves. Countries increasingly seek to reduce dependency on a financial system that can be influenced and coerced by U.S. policy objectives. China has expanded the use of alternative settlement systems such as CIPS and mBridge, while many nations are exploring regional trade arrangements and various reserve diversification strategies.”Wong believes
Gold is becoming the reserve asset of the new multipolar world – Sprott’s Paul Wong ...
onsemi (ON) Stock Falls After TD Cowen Lowers Price Target
onsemi (NASDAQ: ON) shares dropped 5.8% on Monday after TD Cowen lowered its price target on the semiconductor manufacturer to $95 from $110 while maintaining a "Buy" rating.
The reduced price target reflects a more cautious near-term outlook as onsemi continues to face softer demand across its automotive and industrial end markets. While the firm remains constructive on the company's long-term prospects, the lower target suggests that a recovery in key markets may take longer than previously expected.
onsemi has been navigating a prolonged inventory correction, particularly in the automotive and industrial semiconductor segments, where customers have continued to reduce inventories amid slowing demand. Although the company remains well positioned in high-growth markets such as electric vehicles, advanced driver assistance systems (ADAS), and industrial power management, near-term revenue growth has been pressured by weaker customer orders.
Despite lowering its valuation target, TD Cowen maintained its Buy rating, indicating continued confidence in onsemi's competitive position and long-term earnings potential once industry conditions improve.
Monday's selloff suggests investors focused on the more conservative valuation outlook, adding to concerns about the pace of recovery in the analog and automotive semiconductor markets. Investors will now look ahead to onsemi's upcoming quarterly earnings for updates on customer inventories, demand trends, and management's outlook for the second half of the year.
Molina Healthcare (MOH) Stock Rallies After Wells Fargo Raises Price Target
Molina Healthcare (NYSE: MOH) shares gained about 4.1% on Monday after Wells Fargo raised its price target on the managed care company to $235 from $159 while maintaining its "Equal Weight" rating.
The significant increase in the price target reflects improved confidence in Molina's earnings outlook following the recent weakness across the managed healthcare sector. Although Wells Fargo kept its Equal Weight rating, the revised target suggests the firm sees stronger valuation support and improving fundamentals.
Molina has remained one of the stronger performers among Medicaid-focused insurers, benefiting from disciplined cost management, stable membership growth, and a diversified government-sponsored healthcare portfolio. Investors have also become more optimistic that utilization trends and medical costs may stabilize after creating pressure across the health insurance industry earlier this year.
The analyst action comes as managed care stocks continue to recover from recent selloffs driven by concerns over higher healthcare utilization and reimbursement uncertainty. As those fears begin to ease, investors have started reassessing valuations across the sector.
Monday's rally suggests the higher price target helped reinforce improving sentiment toward Molina Healthcare. Investors will now look ahead to the company's upcoming quarterly earnings for updates on medical cost trends, membership growth, and management's outlook for the remainder of the year.
Microchip Technology (MCHP) Stock Drops After TD Cowen Cuts Price Target
Microchip Technology (NASDAQ: MCHP) shares fell 4.9% on Monday after TD Cowen lowered its price target on the semiconductor company to $90 from $105 while maintaining a "Hold" rating.
The price target reduction reflects a more cautious near-term outlook as Microchip continues to navigate a challenging demand environment across its industrial and automotive end markets. While the company remains a leader in microcontrollers and analog semiconductors, customers have continued to work through elevated inventory levels, weighing on new orders.
The revised target suggests TD Cowen expects a slower recovery than previously anticipated. By maintaining its Hold rating, the firm indicated that while the company's long-term fundamentals remain intact, upside appears limited until demand and inventory conditions improve.
Microchip has been taking steps to align production with market conditions, including reducing manufacturing utilization and managing inventories. Investors are now closely watching for signs that the semiconductor inventory correction is nearing an end, particularly in industrial and automotive applications.
Monday's decline suggests the lower price target reinforced concerns about the pace of recovery in Microchip's end markets. Investors will now focus on the company's next earnings report for updates on customer inventory normalization, order trends, and management's outlook for the remainder of the year.
Aon (AON) Stock Gains After JPMorgan Raises Price Target
Aon (NYSE: AON) shares climbed about 3% on Monday after JPMorgan raised its price target on the global insurance brokerage and professional services firm to $412 from $396 while maintaining its "Overweight" rating.
The higher price target reflects JPMorgan's continued confidence in Aon's long-term earnings growth, supported by resilient demand for insurance brokerage, risk management, and human capital consulting services. The firm's Overweight rating indicates it expects Aon to outperform the broader market.
Aon has continued to benefit from favorable insurance pricing, recurring fee-based revenue, and steady demand from corporate clients seeking risk advisory and employee benefits solutions. The company has also remained focused on expanding margins through operational efficiencies and technology investments.
The positive analyst action comes as investors remain constructive on insurance brokers, whose business models have proven relatively resilient amid economic uncertainty. Stable cash flows, strong client retention, and consistent capital returns have made the sector attractive to investors seeking defensive growth opportunities.
Monday's rally suggests investors welcomed the higher valuation target and JPMorgan's continued bullish stance. Attention will now turn to Aon's upcoming quarterly earnings, where investors will look for updates on organic revenue growth, margin expansion, and management's outlook for the remainder of the year.
Ameriprise Financial (AMP) Stock Rises After Piper Sandler Raises Price Target
Ameriprise Financial (NYSE: AMP) shares gained 2.3% on Monday after Piper Sandler raised its price target on the wealth management and financial services company to $518 from $471 while maintaining a "Neutral" rating.
The higher price target reflects increased confidence in Ameriprise's earnings outlook and business fundamentals, even though Piper Sandler stopped short of upgrading the stock. The revised target now sits broadly in line with the company's current market valuation, suggesting the firm sees more balanced risk and reward at current levels.
Ameriprise has continued to benefit from resilient client asset growth, healthy advisory fee income, and strong demand for wealth management services. Higher equity markets and solid client engagement have also supported assets under management and revenue growth across the firm's advisory and asset management businesses.
The positive analyst action comes ahead of the company's upcoming earnings report, with investors expected to focus on net asset flows, advisory revenues, and capital return. Ameriprise has consistently returned capital through dividends and share repurchases, supporting shareholder returns over time.
Monday's gain suggests investors welcomed the higher valuation target, although Piper Sandler's decision to maintain a Neutral rating indicates that much of the company's recent strength may already be reflected in the share price. Investors will now look to quarterly results for further confirmation of earnings momentum and the outlook for wealth management activity.
Allegro MicroSystems (ALGM) Stock Falls After TD Cowen Lowers Price Target
Allegro MicroSystems (NASDAQ: ALGM) shares fell 7.3% on Monday after TD Cowen lowered its price target on the semiconductor company to $66 from $70 while maintaining its "Buy" rating.
Although the firm kept its positive recommendation, the reduced price target signaled a more cautious near-term outlook, prompting investors to take profits after the stock's recent gains. Price target cuts, even when accompanied by a Buy rating, can weigh on sentiment by suggesting more limited upside or slower earnings growth than previously anticipated.
The move comes as investors continue to closely monitor demand across the semiconductor industry. While AI-related chipmakers have continued to benefit from strong investment in artificial intelligence infrastructure, companies with greater exposure to industrial, automotive, and analog semiconductor markets have faced a more mixed demand environment.
Allegro remains well positioned in automotive power and sensing applications, where long-term trends such as electric vehicles, advanced driver assistance systems (ADAS), and industrial automation continue to support demand. However, investors remain cautious about the pace of recovery in broader semiconductor end markets.
Despite Monday's sharp decline, TD Cowen's decision to maintain its Buy rating suggests the firm continues to see attractive long-term potential for Allegro MicroSystems. Investors will now look ahead to the company's next earnings report for updates on customer demand, inventory normalization, and management's outlook for the remainder of the year.
Saia (SAIA) Stock Gains After Bank of America Upgrades Shares to Buy
Saia (NASDAQ: SAIA) shares rose 2.7% on Monday after Bank of America upgraded the less-than-truckload (LTL) carrier to "Buy" from "Neutral" and raised its price target to $502 from $499.
The upgrade reflects growing confidence in Saia's long-term earnings outlook despite ongoing softness in the freight market. Bank of America expects the company to benefit from improving shipment volumes, pricing discipline, and continued market share gains as freight demand gradually recovers.
Saia has continued to expand its terminal network and invest in capacity over the past several years, positioning the company to capitalize on stronger freight activity once industry conditions improve. The carrier has also maintained a solid balance sheet and a history of strong operating execution compared with many of its peers.
The positive analyst action comes as investors have become increasingly optimistic that the U.S. freight cycle may be approaching a recovery after an extended downturn. Expectations for lower interest rates later this year could also support manufacturing activity and shipping demand, providing an additional tailwind for transportation companies.
The Bank of America upgrade reinforced this constructive outlook, helping lift Saia shares during Monday's session. Investors will now look ahead to the company's upcoming quarterly earnings for updates on freight volumes, pricing trends, operating margins, and management's outlook for the remainder of the year.
Skyworks Solutions (SWKS) Stock Extends Decline After KeyBanc Downgrade
Skyworks Solutions (NASDAQ: SWKS) shares fell another 1% in premarket trading after declining 3.5% in the previous session, as investors continued to react to a fresh analyst downgrade released on Tuesday.
KeyBanc Capital Markets downgraded Skyworks to "Sector Weight" from "Overweight," reflecting a more cautious outlook on the semiconductor company. The downgrade suggests the firm now expects Skyworks to perform broadly in line with the sector rather than outperform its peers.
The rating change comes as investors remain cautious about chipmakers with significant exposure to the smartphone market. Skyworks derives a large share of its revenue from Apple and other mobile device manufacturers, making its earnings sensitive to smartphone demand, customer inventory trends, and product cycles.
The downgrade also arrives as investor attention remains focused on AI-related semiconductor companies, which have continued to attract capital following strong demand for artificial intelligence infrastructure. In contrast, analog and smartphone-focused chipmakers such as Skyworks have generally underperformed the broader semiconductor sector.
While KeyBanc did not assign a new price target, the downgrade weighed on investor sentiment, extending the stock's losses into Tuesday's premarket trading. Investors will now look ahead to Skyworks' next earnings report for updates on smartphone demand, customer inventory normalization, and potential AI-related growth opportunities.