Crypto and metals rally

Summary

1. Question marks in the stock market

2. Cryptocurrency prices on the rise

3. Thematic idea: mining companies

Quick recap: Previous week

A week ago, the Kvarn Pulse newsletter was written on a rather optimistic note. The S&P 500 index had remained in an uptrend, the price of gold had turned upward, and positive shifts were beginning to emerge in cryptocurrency prices.

What’s next for S&P 500?

Over the past week, the look of the stock market has shifted from clearly positive to slightly more ambiguous. The S&P 500 index has fallen to around its 20-day moving average. It is still below its 10-day moving average, and this average has, in turn, turned downward.

For now, the performance of the S&P 500 index itself looks like nothing more than a buyable dip. If we look at the internal dynamics of the stock market, however, we can see symptoms that raise slightly bigger question marks.

The QQQ/SPY ratio, which tracks the relationship between the Nasdaq 100 and S&P 500 indices and which we have followed in previous Kvarn Pulse newsletters, has dropped below its 20-day moving average over the past week, and the 10-day average has turned downward.

This continued downward trend in the ratio speaks primarily to the ongoing weakness of large technology companies. Until we see this ratio climb back above its 10-day and 20-day moving averages, we must keep our expectations for index-level performance quite cautious.

The RPG/RPV ratio, which tracks the relationship between growth and value companies, looks even weaker. The RPG/RPV ratio has fallen below its 200-day moving average and is now below all its key moving averages.

In our interpretation, this indicates that investors have clearly shifted to a more cautious stance compared to previous months. This in itself does not necessarily mean that major corrections are in sight. It is good to be aware, however, that corrections are almost always preceded by this type of shift in focus toward more defensive stocks.

Market breadth still looks reasonably good. A clear majority of the stocks in the S&P 500 index remain above their 50-day moving average.

However, this proportion has declined significantly over the past two weeks, and it is now below its 10-day, 20-day, and 50-day moving averages.

This too is not yet an alarming sign on its own. Combined with the weakness of the Nasdaq 100 index, however, it forces us to keep our index-level expectations somewhat cautious. Our primary expectation is that significant upward moves in the stock market would require either the momentum of large mega-cap companies or the growing participation of smaller companies. Right now, we do not yet see either.

The VIX index is currently providing interestingly ambiguous signals. The absolute readings of the index are still remarkably low. On the other hand, the index has been in a slight uptrend over the past week and is currently above its 200-hour moving average. We will not draw strong conclusions from this just yet, but we will keep a particularly close eye on the VIX index over the coming week.

On the bond market side, the MOVE index is not showing any particular warning signs. The index is currently below its 200-hour moving average, which itself is sloping down.

Gold rally continues

The price of gold has continued its strong rise over the past week. The price per ounce of gold has climbed above its 200-day moving average and, from a technical analysis perspective, has entered an unequivocal bull market.

If we plot the S&P 500 index against the price of gold, we can clearly see how their ratio turned downward in early August. Currently, there is no ambiguity about which asset class has the stronger momentum right now.

We are paying special attention to the remarkable strength of gold mining companies.

From the chart below, we can see that while the price of gold itself is still below the local peaks seen in April and May, the price of the VanEck Gold Miners ETF (G2X) is already clearly above these levels.

The price of gold and mining company shares often move at a fairly similar pace. At the moment, however, the mining companies look clearly stronger. Mining company ETFs only have their local January and February 2026 peaks above them before a true "blue sky breakout" to new record highs.

The price of the other precious metal, silver, has also been on the rise. So far, however, its performance looks clearly weaker than gold's. The price of silver is still below its 200-day moving average.

Precious metals as an asset class are therefore experiencing very strong momentum. Silver's relative weakness, in turn, aligns with the risk-off impression painted by the internal dynamics of the stock market. We are watching with interest to see whether silver will begin to strengthen more clearly as the precious metals rally continues.

From the chart below, we can see that in the autumn of 2025, the price of gold turned into a clear uptrend in August. However, we can also see that silver only began to clearly outperform gold about three months later.

Crypto market gaining momentum

One of the most interesting twists over the past few weeks has been the crypto market turning into a strong uptrend. Cryptocurrency prices gained momentum primarily from the U.S. Treasury's announcement to buy back government bonds during the autumn.

Although the amounts to be purchased are not dramatically large in themselves, many investors see a significant signal in these buybacks. If the Treasury continues to buy significant amounts of bonds, this could push government bond yields lower. A drop in government bond yields could make non-yield-bearing assets, such as Bitcoin and gold, relatively more attractive than before.

The prices of many altcoins have also developed strongly. We are paying attention to the strengthening of Ether, which began as early as July, visible as a clear uptrend in the ETH/BTC ratio.

If the crypto market rally were to stall, we expect that one of the first signals would be the ETH/BTC ratio turning downward. Currently, we do not see any signs of this, and our primary expectation for the crypto market remains clearly positive.

Further support for optimism comes from the performance of the HYPE token from Hyperliquid, perhaps the crypto sector's most interesting decentralized exchange. HYPE's price has already climbed to new record highs over the past week. HYPE's price has been in a strong uptrend throughout 2026. It will be quite interesting to see how it develops if it begins to get a further boost from the broader uptrend in the crypto market.

Thematic ideas: mining companies

One of the most interesting investment themes right now appears to be various metals.

Metals are a key element of the so-called "debasement trade", where investors seek to protect themselves against the expected weakening of fiat currencies, particularly the U.S. dollar. The U.S. Treasury's interventions in the currency markets and announcements of government bond buybacks seen over the past few weeks have increased inflation expectations for many investors, prompting them to seek protection against inflation in assets like metals.

During August, we have not only seen the prices of precious metals, such as gold and silver, perform exceptionally well. In addition to these, the prices of industrial metals have also turned into a promising uptrend.

As this week's thematic idea, we are highlighting metal-producing mining companies.

The price of the Global X Copper Miners ETF (4COP) turned into an uptrend in mid-July and is currently already close to the peak levels seen in January and February.

As an interesting individual theme within metals, we highlight uranium, which is linked to nuclear energy. The price of the Sprott Uranium Miners ETF (U3O8) turned into a clear uptrend in early August and has climbed about thirty percent from its lows.

Conclusion

The "debasement trade" was one of the strongest performing themes in the latter half of 2025. At that time, the prices of metals, particularly gold and silver, rose exceptionally strongly. The rise in metal prices seen in recent weeks closely mirrors the phenomenon we saw last autumn.

A difference from last year is that heading into the autumn of 2025, Bitcoin was at the peak of a three-year bull market, and its price found no further boost from an otherwise favorable market environment.

This year, the situation is different in this regard. Bitcoin has a year-long bear market behind it, and its price has come down over 50 percent from its peak levels. It will therefore be interesting to see if Bitcoin's price will rally alongside metals this time around. So far, the situation looks quite promising in this respect.

The financial markets are currently in a very interesting position. The stock market is searching for direction for its next major move, while cryptos and metals are experiencing strong momentum. Wherever the market goes, we will continue to monitor the situation and return next week with another Kvarn Pulse newsletter, so stay tuned!