(Kitco News) - Gold prices soared to fresh record highs Wednesday, surging more than $100 intraday to hit $3,345 an ounce, as geopolitical risk and rising trade tensions drove investors out of equities and into safe-haven assets. In an interview with Kitco News, veteran technical strategist Katie Stockton warned that a new phase of market volatility may just be beginning – and that gold could remain a key outperformer while equities face "a challenging year."
“It appears to be just that,” Stockton told Kitco News anchor Jeremy Szafron when asked whether recent volatility marked the start of something more serious. “We have some indications from our long-term charts… and the loss of momentum behind the S&P 500 at this stage is very serious.”
The Founder and Managing Partner at Fairlead Strategies emphasized that monthly momentum indicators have flipped to sell signals for the first time in years, and that major indices have confirmed breakdowns. “Now it’s become quite obvious that we’re in a different type of environment characterized by more volatility for equities,” she said.
The timing coincides with a stark global trade downgrade issued by the World Trade Organization Wednesday, which now expects world merchandise trade to decline by 0.2% in 2025 – and as much as 1.5% if retaliatory tariffs are fully implemented. Meanwhile, U.S.-China tensions have intensified, with Nvidia shares tumbling after the firm disclosed a $5.5 billion charge linked to chip export bans.
Against that backdrop, Stockton said gold’s breakout is technically sound. “We want to stay with the momentum behind gold – it’s obviously very positive, and that goes for all timeframes,” she said. “Monthly, weekly, and daily bar charts… those indicators there are all positive.”
While noting some signals of short-term “upside exhaustion,” Stockton said they were not yet enough to reverse her constructive outlook. “We don’t have an upside objective because our objectives have been met and exceeded,” she said. “The best thing we can do is keep those moving averages and indicators on our side.”
Stockton, who correctly called a new commodity bull cycle in June 2024, noted that gold remains the standout. “We have not seen the kind of upside that we were looking for from the price of crude oil,” she said. “Natural gas appears to have a long-term basing phase in place, whereas crude oil has a pretty fresh breakdown.”
In contrast, copper has shown long-term strength but remains volatile in the short to intermediate term. “It’s important to sort of play the swings there if you’re involved,” she said.
Turning to equities, Stockton confirmed that Fairlead’s Tactical Sector ETF (TACK) is leaning increasingly defensive, with exposure shifting out of technology and into real estate, utilities, and consumer staples. The ETF also holds both short-term and long-term Treasuries, as well as gold.
“Our long-term gauges have shifted pretty meaningfully in favor of those more defensive areas,” Stockton said, adding that TACK’s exposure to “risk-off” assets is likely to grow. “That’s a great way to limit drawdowns when the equity market is under pressure.”
Despite equity volatility, TACK still holds nearly 87% exposure to stocks – but Stockton emphasized that the model is systematic and has previously dropped equity weighting to just 12.5% when conditions warranted. “We do expect to remove more of the sector exposure… as things progress,” she said.
The real inflection, she warned, may be forming in big tech. Stockton recently issued a major sell signal for the Nasdaq 100, its first since 2022, and said the loss of momentum in mega-cap stocks is driving relative underperformance across sectors. “It does appear to be the start of a more lasting reversal,” she said.
On Tuesday, Nvidia shocked markets with a $5.5 billion charge tied to U.S. chip export restrictions. The Nasdaq fell over 2% at the open, deepening a selloff in semiconductors and big tech.
On Nvidia specifically, she noted the stock remains above key support, but warned investors: “We think this is a relief rally that should be sold into for now.”
Bitcoin, she added, is also lagging and behaving more like a risk asset than a safe haven. “It’s been more closely tied to the equity market of late,” she said. “We currently have a neutral long-term bias.”
As for the broader outlook, Stockton advised investors to lean on defensive positioning, favor gold, and raise cash. “Build the defensive sectors relative to the likes of the technology sector over time,” she said. “Hold an above-average cash balance… think of that cash balance as something that you can ultimately put to work.”
One key risk Stockton highlighted: credit spreads. “Credit spreads have effectively established what technicians call a double bottom formation,” she said. “That does present somewhat of a risk to the economy – or at least a perceived risk at this stage.”
Still, she sees a light on the horizon. “Thankfully, 2026 – we have some indicators that already are suggesting that we should see a nice resumption of the uptrend then,” Stockton said.
Watch the full interview with Katie Stockton – including technical charts and market signals – only on Kitco News.