Friday Recap (10/4/2024)
AU: $2650 ($2653 - Last Week Spot)
AG: $32.13 (31.61)
HUI: 315 (326)
DXY: 102 (100)
S&P: 5750 (5738)
10-Yr: 3.9% (3.7%)
Oil: $74 ($68)
The news this week was the jobs report today, which was well received on Wall St, but was total baloney. The Biden Administration has a habit of issuing crazy numbers that are not believable only to revise them lower. We are close to an election, so it is not a surprise that today's numbers were crazy. For instance, the number of added government workers was the highest ever (785,000 new government jobs in September). They clearly padded it to lower the unemployment rate to 4.1%. This was shenanigans and blatant manipulation of the data. They know they can get away with it, and so they are not holding back. Why the shenanigans? Because they want to prevent a stock market correction prior to the election to make the economy appear strong.
Gold was flat for the week. Silver was up a bit, with a $32 close. That's a nice showing for silver; however, the miners lagged and were down for the week (closing at 315). The gold miners currently have an average FCF margin of around 34% ($1750 breakeven gives us a margin of $900 per oz). The silver miners are starting to catch up, with a margin of around 26% ($23.50 breakeven gives us a margin of about $8.50 per oz).
Even with these pretty good overall margins, the HUI has languished. I think this is a flashing red light that a rug pull is coming. Mining investors are savvy, and they don't want to catch a falling knife. Plus, until the HUI breaks out at around 340 or 350, investors will remain cautious. We are still waiting for both silver and the miners to break out with gold.
There are many warning signs. For instance, the Fed cut rates 50 bps, yet the 10-Yr bond jumped to 3.9% this week, and the dollar (DXY) jumped to 102. They should be going in the other direction if the economy is improving and inflation is abating. I don't think we will get through October without some type of stock market correction. I expect the election to occur with the S&P below 5500, and then after Harris wins, for it to crash in November. I continue to believe that Q4 is going to be wild (for the wrong reasons).
