A Volatile Start To The Week For Global Markets – Metals & Oil Collapse

Overnight, on Sunday and early Monday, Precious Metals and Oil started a fairly big collapse which quickly bottomed and recovered – at least in the Precious Metals markets. Crude Oil was still moving lower in early trading on Monday, August 9, 2021. Can we learn anything from the pre-COVID market trends and extrapolate any real-world analysis from this?


One thing that struck me related to this move is this is a similar type of move that took place at the start of COVID in February 2021. Crude Oil started to move lower in early January 2020 while the US stock market continued to move higher before the COVID virus event hit. Gold also moved higher from January 2020 to a peak in February 2020 – just before COVID. Yet, all of them, Precious Metals, Oil, and the US major markets, moved dramatically lower as soon as the reality of a COVID type economic event setup and traders realized the scope of the issues before all of us.

Today, we are seeing the Precious Metals, Oil and the US major markets move dramatically lower with what appears to be a moderate “flash crash” type of event in Precious Metals and Oil. If we see a continued decline in the markets over the next few days/weeks, we might start to consider a new volatility event may be setting up related to the future expectations of the global economy, US economic and Federal Reserve policies/activity, and how the unknown aspects of the future of the global economy continue to play out.

This Daily Gold Futures chart highlights the deep “flash-crash” type of price action that took place early Monday, August 9, morning. My research team and I believe this move reflects a very deep concern by the US and foreign investors related to the future global economic reflation abilities. Even though many still believe the global markets will continue to recover and grow, we believe the post-COVID recovery may already be near a peak level and starting to flatten out/contract.

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