XAUUSD4376.595 The Fed hiked by 25bp this week. In Tactical Positioning on March 15, I explicitly wrote that a prolonged war would keep yields grinding higher, “forcing the Fed to hike.”

Yields remain elevated, with the 10-year finishing the week back above 5%. I read the continued repricing as the rest of the market catching up to our thesis that this war could last much longer than they initially expected.

FOMC day nevertheless provided a low-risk tactical setup for going long equities and gold. I went long both that day, but my post could not be published due to platform restrictions. These trades will therefore remain outside the published track record.

Gold faces strong resistance around 4.4K. Unless Brent breaks above 120 in the ST, I doubt yields will spike enough to trigger a major collapse in gold. That could come after the election. The same goes for equities. I am holding NQ longs and expect NQ and ES to print new ATHs in the coming weeks, contingent on the conditions I will outline in the global indices section.

My tactical long in gold does not mean the macro backdrop has turned favorable for precious metals. My longer-term view remains unchanged. The longer the war sustains the supply shock, the greater the upward pressure on inflation and yields. Hiking does not produce barrels.

If the conflict becomes a years-long war, consistent with the view I have held since its first week, I still expect gold eventually to trade below its July low. For those holding gold longs, trail your stops to protect your profits.

Gold and Treasury yields both rose on Friday. Keep an eye on this tandem move, but it is a one-day move. Do not mistake it for a lasting change in their correlation. In the August 3 issue, I wrote, “Higher yields have traditionally been a headwind for gold, but gold and silver can decouple from yields. I expect both metals to rally alongside yields when the time comes.” Last week, I repeated that the next phase of gold's major rally begins only when it decouples from the dollar and yields. That remains the development I am waiting for. Whether Friday marks its beginning remains to be seen.