Gold Price on a Rollercoaster

Key Takeaways

1. The stock market continues its uptrend, but a closer look raises some questions.
2. The sideways movement of the crypto market appears to have turned into an actual downtrend.
3. Gold price has continued a frantic rally, becoming extremely volatile in the process.

Quick Recap:

In last week’s Kvarn Pulse newsletter, the general outlook for the markets appeared quite positive. At the time, we summarized our view into three points:

1. Tariff threats rattled the stock market, but for now, the biggest fears seem to have been left behind.
2. The rally seen in the crypto market starts to look like a “fake-out”.
3. The price of gold continues its aggressive surge, already approaching $5,000 per ounce.

Stock Market in an Uptrend

The S&P 500 index has continued to climb over the past week. On Wednesday, the index saw a brief intraday breakthrough of the 7,000-point mark.

The index is currently above all key moving averages. As long as this remains the case, our baseline expectation is for the uptrend to continue.

The Kvarn X Technical Stock Index has also turned green, signaling an upward trend.

Even the Nasdaq 100, which has been a somewhat "weak link" in recent months due to its heavy weighting in large tech companies, is showing clearer signs of breaking its sideways movement and returning to an uptrend. Over the past week, the Nasdaq 100 rose above its recent range, momentarily surpassing 26,000 points.

Furthermore, the Relative Strength Index (RSI) has charted a second consecutive "higher high," suggesting that the momentum which stalled in late 2025 is recovering.

Kvarn X Early Warning Indicator shifted from orange back to yellow this past week. This suggests that the nervousness triggered by tariff threats at the start of last week is subsiding.

In summary, the stock market situation looks quite constructive. The sideways movement seen in late 2025 is increasingly transforming into a new uptrend.

However, if one were to look for reasons for concern, they could be found by analyzing currency fluctuations. The U.S. Dollar has weakened significantly against several major currencies recently, which makes the prices of dollar-denominated assets look very different in other currencies. For example, the price of the Euro-denominated iShares Core S&P 500 ETF has actually been trending downward for the past two weeks.

This raises questions about how much the S&P 500's uptrend is supported merely by the weakening of the dollar (the denominator). Our confidence in the trend would grow if we saw the index trending upward more clearly, regardless of the currency-nomination.

Crypto Trending Downward

Last week, we wrote that the upward move attempted by the crypto market a couple of weeks ago seemed to be a "dud." This interpretation has been reinforced as Bitcoin has fallen below $83,000.

We have stated several times in recent months that we view Bitcoin's price movements between $84,000 and $94,000 primarily as "noise," only drawing stronger conclusions once the price moves outside this range. The price has now moved outside this range, forcing us to prepare for a continued downtrend.

For those seeking an optimistic interpretation, it could be found in the nuance that, so far, the price has remained slightly above the temporary bottom seen in November (approx. $80,500).

An optimist might see a "double bottom" here. According to this view, there is enough buying pressure around the $80,000 psychological level that the price failed to drop below it on the second attempt. Double bottoms are favorites for some traders as they offer a chance to buy near the absolute bottom.

However, the credibility of this interpretation is weakened by the fact that this "double bottom" is only visible in USD. Against Japanese Yen and Euro, Bitcoin has already made a "lower low," which unambiguously points toward a continuation of the downtrend.

For the more pessimistic observer, Bitcoin's weakness may cast a shadow over the sustainability of the stock market rally. If stocks move up only in dollars but not in euros, while Bitcoin continues to drop, are these signs that the stock market rise is based solely on dollar weakness? Could we soon see stocks turn downward even when measured in dollars?

This is early speculation, but a hypothesis worth keeping in mind. For now, the S&P 500 and Nasdaq 100 remain in an uptrend in their primary currency, so we remain cautiously optimistic.

Gold Price on a Rollercoaster

While the crypto market, traditionally seen as extremely volatile, has been relatively uneventful, the volatility of gold has begun to resemble an altcoin more than a stable store of value.

During January 2026, gold has been on a wild rollercoaster, rising nearly 30% from the start of the year at its peak. As is often the case with massive rallies, the market has attracted more speculative and short-term investors.

To illustrate the absurd pace: financial giant Goldman Sachs updated its year-end gold price forecast just last week from $4,900 to $5,400 per ounce. 

It took about one week for that year-end target to be met, and the following day, the price exceeded it by about 4%.

As speculative mania grew, gold's volatility reached levels where the price swung several percentage points a day, sometimes within hours. Following a nearly vertical ascent, gold has recently seen a sharp move downward, dropping about 10% in a 24-hour period from Thursday to Friday.

This drop has brought the price of gold just above the 10-day Exponential Moving Average (EMA). The 10-day EMA is one way to track the development and potential break of a parabolic trend. Looking at the chart, we can see how dipping below it served as a solid signal for the end of the previous parabolic move in October 2025.

So far, this threshold has not been breached. In the short term, the $5,000 round number appears to be a significant watershed level.

As long as the price stays above $5,000, we see the possibility of another leg up. Conversely, falling below this level would confirm that the most aggressive speculators have likely given up for now, potentially leading to a consolidation phase between $4,600 and $5,000.

We leave the reader with these thoughts in an extremely interesting market environment. There are question marks in equities, crypto is down, and gold is skyrocketing. The beginning of 2026 has been anything but boring, and we expect the momentum to continue next week.

We will keep monitoring the situation and return with another Kvarn Pulse newsletter, so stay tuned!