1) The Fed cut rates 50 bps today. This is the beginning of their cutting cycle and a significant turning point for the markets. No one knows what will happen, but Wall St remains bullish/confident that lower rates will reignite the economy (which is slowing) and not reignite inflation. I think both expectations are long shots. The more likely outcome is a recession and stagflation. I expect Q4 to be volatile, with a likely crash in stocks, as we head into a recession.
2) Gold and the stock market have correlated 1 to 1 all year. When stocks finally crash (after a 15-year bull market), we can expect gold/silver and the miners to fall with it. I expect a 10% correction in gold/silver, and perhaps 15% to 20% in most miners. If a miner only falls 10%, they will be lucky. The good news is that gold will likely quickly bounce after it corrects 10%. I’m expecting a strong end of year rally in gold/silver and the miners.
3) My targets for year-end are gold at $2600 to $2800, silver at $35 to $40, and the HUI at 350 to 400. Hopefully, we will reach the upper range of my targets. I expect 2025 to be a huge year for gold/silver and the miners.
4) The only number that matters is the S&P 500. I think that is why the Fed cut rates 50 bps. They didn’t want a stock market sell-off in October. Once the S&P is below 5200, the fear trade will begin, and it will only increase as it falls to 5000, 4800, and then 4500. Below 4500, and the recession will arrive.
5) It’s possible the stock market could go a bit higher before it rolls over, but we are in the final stages of this melt-up top. It won’t be long now before the selling begins. My guess is October or November after Harris wins the election (you don’t think they are going to let Trump win, do you?).
Did you mean Fed lowered rates by 50b.p.?