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Theatre of Doves

Wall Street this week felt like a “theatre of the doves” where every cue was perfectly timed: the PPI rolled out the red carpet, and CPI turned it into a full-blown runway show for Powell to stride toward rate cuts. Inflation came in tame—not slain, but tamed enough that nobody in the audience feared the beast would break its chains. And then, almost on cue, jobless claims spiked to their highest in four years, a reminder that the real story is less about prices and more about a labour market starting to fray. The curtain lifted, the music swelled, and traders rushed to bid stocks to fresh records, while Treasury yields briefly dipped below 4% as if bowing to the inevitable.

What was once a balancing act between inflation and job creation has tipped into one-way production. The hawks have retreated into the rafters, the doves have taken center stage, and the mandate looks rewritten. After the payroll revisions gutted past job strength and recent NFPs came in limp, the Fed’s performance is no longer a question of “if” but “how fast.” This isn’t choreography improvised on the fly—it’s a script already in rehearsal.

The dollar traded like a stand-in, a proxy for the Fed’s rate cut tempo. Yes, it slipped, but within the same confines it’s been chained to all week. Its moves are less about independent conviction and more about how aggressive Powell might be with the cuts. Outside the U.S., the divergence sharpens the plot: the ECB has taken its bow and claimed the job is done, though tariffs or China’s deflation could pull them back for an encore, while the BoJ hints at raising rates, a plot twist that leaves USD/JPY eyeing the 146 handles.

Meanwhile, gold has stolen the encore, surging past its inflation-adjusted 1980 high. With yields retreating and inflation refusing to roar, the metal feels less like a hedge and more like an understudy suddenly thrust into the limelight. It’s performing not just as a store of value but as a store of credibility in a world where central banks are rewriting scripts mid-show.

And just as Powell’s stage directions dominate one side of the play, artificial intelligence is rewriting the narrative arc of technology altogether. Oracle—a veteran actor many thought relegated to supporting roles—suddenly surged 36% after signing massive AI-driven cloud contracts. Analysts, supposedly with the playbook in hand, were caught flat-footed as if their valuation models belonged to a bygone era. AI isn’t just another subplot; it’s mythology in the making, where growth is non-linear and the old formulas collapse under forces markets haven’t learned how to model.

The curtain now rises on an easing cycle, a dollar fortress with bricks crumbling one by one, gold rewriting its own legacy, and AI refusing to stay within the confines of spreadsheets. Every act flows into the next like a production rehearsed to perfection. But markets know the danger of overconfidence—when expectations of a flawless performance build, even a single missed line can turn applause into stunned silence.

Oracle’s AI Earthquake and the Shattered Compass of Valuation

The ground just shifted under Wall Street’s feet, and the old valuation compasses are spinning wildly. Oracle (ORCL), the grizzled veteran of Silicon Valley, suddenly erupted like a dormant volcano that everyone assumed had gone cold. In the space of a single earnings call, a company written off as yesterday’s news morphed into a frontline AI infrastructure play, leaving the sell-side gasping for air.

For decades, analysts have sworn by the same navigational charts: discounted cash flows, forward P/E ratios, earnings multiples. They’ve used these tools like sextants on the open sea. But now, the waves of artificial intelligence are swelling in non-linear surges — currents that defy the linear assumptions baked into those models. Oracle’s sudden 36% melt-up isn’t just about one stock; it’s about the broader realization that the market’s cartography is out of date.

Larry Ellison, the grizzled helmsman, pointed the ship toward “AI inference” — taking pre-trained models and embedding them into the daily workflows of global enterprise. That’s not speculative vaporware; it’s practical monetization, and it slots directly into Oracle’s bread-and-butter business. Contracts are piling up like container ships outside a crowded port — $455 billion in obligations, four times last year’s tally. The old guard, with their price targets and tidy spreadsheets, never saw it coming despite 47 sets of “coverage.” It’s like being a weatherman who misses a hurricane because the instruments don’t measure storms of this new magnitude.

The bigger issue isn’t just the stock. It’s credibility. If analysts keep low-balling the earnings power of companies tied to the AI boom, their numbers lose meaning. Multiples — the bedrock of equity valuation — crumble into sand when the market stops believing in the anchor. What’s the point of a forward P/E if forward itself is impossible to define? The market starts discarding the map and sailing by instinct, a dangerous but inevitable adaptation.

This is déjà vu from the dot-com days, when Oracle itself rode an 80% plunge after the bubble burst. Back then, it was easy to dismiss wild multiples as froth. But today, the AI revolution is already laying track — every enterprise CIO is under pressure to board the train before it leaves the station. The adoption rate may be only 10% economy-wide, but the marginal buyer is already willing to pay monopoly-tax valuations for companies like OpenAI. That soft $500 billion private valuation is less a price tag than a declaration that valuation orthodoxy is a relic.

So where does this leave the market? The traditional spreadsheet math — neat rows of projected earnings — can’t capture the convexity of technological leaps. When disruption arrives in quantum jumps rather than arithmetic progressions, the models must evolve. The option-pricing lens — treating every AI platform like a call option on the unknown upside — might finally graduate from the ivory tower into the analyst playbook. Because ignoring the blue-sky optionality is no longer conservative; it’s malpractice.

In the end, Oracle’s eruption is a reminder that we’re entering an era where the old anchors of valuation are breaking free. The market is adrift in a sea of technological unknowns, and the only certainty is that yesterday’s tools won’t steer tomorrow’s trades. The charts need redrawing. The compass needs recalibration. And investors who don’t adapt will find themselves navigating with broken instruments, while those who recognize the new cartography may discover entire continents of value hiding just beyond the visible horizon.

Gold’s Continental Shift Moment

There are moments in markets when history doesn’t sit in the archives but strides back onto the stage. Gold just had one of those moments. For the first time since the Carter-Volcker era, bullion has blasted through its inflation-adjusted ceiling, the ghost of the 1980s $850 peak now lying behind us like a cracked mirror. At $3,674 an ounce, gold is no longer the understudy — it’s taken center stage, bow in hand, conducting the orchestra of global anxiety.

This isn’t just numbers on a Bloomberg screen or nominal records stacked like poker chips. Surpassing that adjusted high is a symbolic coronation, a torch passed across four and a half decades of currency debasement, fiscal excess, and central-bank contortionism. In 1980, the U.S. was struggling with double-digit inflation and geopolitical turmoil. Today, the world is again reaching for safe harbour — not from hostages in Tehran but from deficits without brakes, debt without ceilings, and a Federal Reserve dragged deeper into the political coliseum. The rhyme of history doesn’t need to be perfect when the chorus is unmistakable.

Unlike the parabolic mania of 1980 — when prices doubled in weeks and collapsed just as fast — today’s rally has been a slow burn turned wildfire. Gold has risen nearly 40% this year, but it has done so like the steady lift of continental drift — imperceptible day to day, monumental over time. That’s why this feels different. Liquidity is deeper, access broader, and the buyers more diverse: central banks hedging against sanctions and dollar dominance, ETFs hoovering up retail flow, and sovereign wealth funds quietly stacking bars in London vaults now brimming with over $1 trillion in bullion. The euro may exist on paper, but in reserves, gold has overtaken it as the world’s second-most trusted asset. That isn’t a quirk of flows; it’s a tectonic shift.

At the heart of it all sits the dollar. A selloff in Treasuries and waning appetite for U.S. paper earlier this year reminded everyone that “risk-free” only holds until politics and deficits say otherwise. President Trump’s tax cuts, tariff crusades, and direct pressure on the Fed have accelerated a sense of monetary fragility. Investors are paying up for gold not because it’s cheap insurance but because it’s the only insurance they believe still pays out when the house is ablaze. Expensive? Absolutely. But relative to an equity market frothing at record highs, bullion still looks like the undervalued ticket if the music falters.

And falter it might—rate cuts — once a gift to risk assets — are now a double-edged sword. Historically, easing has boosted gold by clipping the wings of Treasuries and undercutting the dollar. That playbook is alive again, but now with a darker hue: what if cuts are not just cyclical but coerced, a Fed bullied into submission? That scenario is rocket fuel for bullion. It echoes Nixon’s 1970s arm-twisting, which preceded a colossal gold rally. Back then, the dollar cracked under political weight and oil shocks. Today, deficits, sanctions, and multipolar geopolitics are the accelerants.

Gold’s run is no longer a fringe trade whispered about by perma-bugs. It’s the consensus hedge in a world where consensus itself is breaking down. The safe haven once mocked through the 1990s and 2000s — dismissed as a barbarous relic in an age of globalization and dot-com euphoria — has staged the ultimate comeback. Central banks that once sneered at it are now racing to hoard it. Retail investors who thought crypto was the new gold are drifting back to the oldest store of value on Earth. And high-net-worth capital, increasingly skittish about holding assets that can be frozen with a stroke of a Treasury pen, is finding reassurance in yellow metal that ignores borders.

This is not just price action; it’s theatre. The curtain has risen on a multipolar financial order, and gold is playing the lead with a script that stretches back millennia. Every tick higher is a reminder that confidence, once lost in currencies or bonds, rarely returns quickly. And while charts tempt traders to fade the move — recalling the crash after 1980 — the structure of this rally looks less like a bubble and more like a repricing. Insurance is costly because the risks are real.

Gold at $3,674 is not the finale. It’s the overture to a new act where bullion has vaulted from relic to reserve kingmaker. If equity markets wobble, if the dollar’s fortress shows more loose bricks, or if politics pushes the Fed from referee to pawn, the metal could easily climb further into the stratosphere. In a world of shifting ground, one truth endures: when trust frays, gold ascends.

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