Friday Recap (9/20/2024)
AU: $2620 ($2577 - Last Week Spot)
AG: $31.10 (30.70)
HUI: 328 (328)
DXY: 100 (101)
S&P: 5702 (5626)
10-Yr: 3.7% (3.6%)
Oil: $71 ($689)
The big news this week was the Fed lowering rates 50 bps. The stock market rallied and closed at a weekly ATH above 5700. Gold and silver also rose, but the miners were flat for the week. What's up with the miners? I've been doing this a long time (since 2004), and when the miners lag, it always means the same thing: a correction on Wall St is coming. I've been saying this for months and months. The miners are not going to break out into a bull market until the fear trade arrives. The good news is we are almost there.
It's not only the gold/silver miners that are lagging; so it silver. The cycle high for the miners (HUI) was 360 in August 2020. We need to get above 340 to begin a renewed bull market in the miners. Silver reached a new cycle high in May at $32.50 and has been in a correction all summer. Today, silver closed above $31. So, it's very close to a new cycle high. I think we need to get silver above $35 to consider this a breakout in silver. If we don't get above $35, then we could retest the $25 to $27 area.
My best guess is that the stock market is going to crash in Q4 by more than 20%. Any level for the S&P 500 above 5200 and Wall St (and the average investor) will remain calm, but once below 5200, it will get dicey. Once below 5000, 4800, and finally 4500, and the 15-year bull market is finally over.
My cycle low targets for gold/silver/HUI remain at $2200 to $2300, $25 to $27, and 260 to 270. Hopefully, gold will continue to lead and we won't retest these levels, but the odds imply a big sell-off in stocks/gold/silver/miners. The key for us will be gold and where it bounces. My expectation is that it will bounce at $2250 or higher. $2400 seems lofty, but $2300 is possible. We might get lucky, and the BRICS will announce a new crypto token in October backed by gold. That could create a higher floor for gold. Or, Japan could raise its interest rates and push the gold floor higher. Right now, I think the floor is somewhere between $2200 and $2300.