Jurrien Timmer, Global Macro Director at Fidelity Investments, has observed that speculative capital, known for its high risk appetite, is rapidly exiting both crypto assets and precious metals, with investors now shifting toward semiconductor stocks. According to Timmer, this shift in direction has triggered sharp price movements among alternative stores of value, reflecting the changing dynamics of the market.
Speculative capital shifts from crypto and gold to technology stocks
Timmer explained that speculative interest initially concentrated in Bitcoin before migrating to gold. This trend, he noted, fueled a near-vertical rally in the gold market. More recently, rapid capital has largely moved past metals and poured into the technology sector—especially semiconductor shares. Fidelity Investments, counted among the world’s largest asset managers, is closely watched for its macro outlook and market flow analyses.
A slowdown in global M2 money supply growth from a peak of 12% to 7% makes the weakness in gold understandable; however, the pullback in gold has been much sharper compared to this limited slowdown in M2 growth, Timmer commented.
Historically, Timmer noted, gold traded predominantly based on the real interest rate model—typically moving inversely to real yields. However, recent figures suggest that the correlation between gold and real interest rates has weakened significantly.
Liquidity emerges as the key driver for gold prices
Timmer pointed out that the relationship broke down at the start of 2022, with gold increasingly reflecting global liquidity conditions. According to Fidelity’s data, the primary force behind gold’s surge has been growth in the broad money supply, known as M2. When M2 annual growth hit 12% at the start of 2026, gold prices also reached an all-time high of $5,595.
Mini glossary: M2 is a broad money supply indicator that includes cash in circulation, demand deposits, and similar liquid assets that can be quickly converted to cash. It is widely used as a gauge for market liquidity trends.
As global M2 growth retreated from its 12% peak down to 7%, gold experienced a sharp drop to $3,959. Timmer argued that this downward movement may very well be an overreaction from the market.
| Indicator | Previous | Current |
|---|---|---|
| Global M2 growth | 12% | 7% |
| Gold price | $5,595 peak | $3,959 low |
| Dollar Index | Below key resistance | 101.8 |
Bitcoin faces pressure as dollar strengthens
During the same period, market expectations shifted towards the US Federal Reserve potentially reversing its recent rate cuts—a scenario that contributed to notable strengthening in the US dollar. Timmer highlighted that as central banks worldwide turned more hawkish, the dollar broke out of a prolonged period of sideways trading, establishing a clear uptrend.
The Dollar Index climbed to 101.8, breaking through a key resistance area, Timmer noted.
The strengthening dollar and stricter financial conditions have weighed on risk assets. According to Timmer, these developments have created an unfavorable environment for more volatile instruments, including Bitcoin.
Bitcoin itself is struggling to maintain its footing above the $60,000 threshold. The redirection of speculative capital toward technology stocks has reduced short-term demand within the crypto market, while both the strong dollar and tighter monetary conditions have added further pressure to digital assets.
