Friday Recap (10/11/2024)
AU: $2656 ($2650 - Last Week Spot)
AG: $32.50 (32.13)
HUI: 319 (315)
DXY: 102 (102)
S&P: 5815 (5750)
10-Yr: 4.0% (3.9%)
Oil: $75 ($74)
Gold/silver/miners all spun in place. It seemed like a good week because we had a good Friday close, but it was really a nothing-burger week, and the miners were actually down. The story remained the stock market, with the S&P closing above 5800 for the first time ever. As the S&P 500 trends higher, gold follows it. They have correlated nearly 1 to 1 since March. Silver and the miners have tried to catch up to gold, but haven't been able to, as both continue to lag. We still need to see $35 silver and 350 HUI to get excited. Once that happens, silver will rip to $50, and the HUI will rip to 500 in a short period of time.
Wall St remains bullish for Q4. I don't. I expect Harris to win on November 5th and Wall St to have convulsions. Thus, I still expect a rug pull in gold/silver/miners in Q4. The good news is that this correction will not be deep. I keep raising my expected cycle low. I used to think we would see $2200 retested. Then, I raised that to $2300. Now I think $2350 will hold, which is about a 10% drop for gold. Silver will likely drop somewhere to around $27, perhaps a bit lower, but not much.
The S&P 500 remains the most important data point. I continue to wait for the top, but no matter which direction the S&P goes, gold will follow, and silver and the miners will continue to lag until the correction finally arrives. I think the economy is a house of cards, and the HUI is our indicator. The HUI should not be at 319 with gold at 2650. Margins have ripped higher for gold miners, and gold stock investors don't care. That's a strong indicator that a rug pull is coming and not a sign that the train is leaving the station with gold mining stocks blasting off.
Bull markets end in euphoria, and that is exactly what we have right now. On the CNBC Halftime show, they were bragging today that you can't find a bear on Wall St, and that only idiots are on the sideline. The last two weeks have been an ongoing kumbaya party on each episode (I watch the first segment while I stretch in the morning). The final bear, Jenny Harrington, didn't have the conviction today to throw any cold water on the party. Even she said this market is strong and she was a buyer. The entire committee is currently bullish. Okay, it's time for the crash.
