Friday Recap (11/8/2024)

AU: $2683 ($2735 - Last Week Spot)
AG: $31.25 (32.42)
HUI: 311 (317)
DXY: 104.8 (104)
S&P: 5995 (5728)
10-Yr: 4.3% (4.4%)
Oil: $70 (69)

The big news this week was the election. I expected a close vote and a Harris victory. Biden got 81M votes in 2020, plus we had about 10M immigrants. I thought for sure Harris would get at least 80M votes, but she only received 69M. Where did those 12M voters, plus the immigrants, go? Trump received 74M. She would have won if she matched Biden's tally in 2020.

The Trump victory creates a lot of confusion for gold investors. Gold/silver/miners all got whacked, just like in 2016 when he won. Why? Because of confidence that Trump can revive the economy. Wall Street was happy, pushing the market to an ATH today, with the S&P trading above 6,000 for the first time. Trump won't raise taxes and will reduce regulations, both of which are good for the economy. Plus, he will likely end both wars, putting downward pressure on oil prices. 

So, the bull market on Wall Street continues. The question is, how long will it last? That's a big unknown because we don't know how the economy will react to his policies. We might have to wait months for the economy to roll over into a recession. Conversely, it could happen in weeks. The consensus on Wall Street is that this melt-up will continue into year-end, and they are going to have a jolly Xmas, with big bonuses. Maybe, but maybe not.

Gold is not likely to crash, although a 10% correction from the recent top is likely to happen at some point. Gold still has several factors supporting it. Central banks are still concerned about the US Government bond market and the US economy. Central bank buying of gold will continue, especially in BRICS countries, which are trying to move away from the dollar. The US government budget continues to be a mess.

Interest payments on debt were over $1T in 2024 and will be over $1T in 2025. The budget deficit was $1.9T in 2024 and will be over $2T in 2025. Spending is out of control. Does Congress have an appetite to cut spending? Elon Musk is supposed to join Trump's team and instigate spending cuts. Let's see how that works out.

I expect gold to reach $3200 in 2025 and silver to reach $60. So, I remain bullish. However, in the near term, I'm back in buy mode and plan to continue buying until the HUI reaches 350. I added 3 stocks this week (which I posted on X and GSD), and probably will add 2 more next week. I want to accumulate as many shares as I can before the HUI reaches 350 (and then takes off).

Don't be afraid of any dips in gold and silver. See them as buying opportunities. The chance of Trump fixing the economy and avoiding a recession is unlikely. He is behind the 8-ball, with the debt bubble leaking air. The Fed has already lost the long end of the bond market (they have cut 75 bps, and long bond yields went up). This is going to get messy and won't be an easy mess to clean up. If Trump can avoid a recession and can keep gold under $4K in the next 24 months, I'll be as surprised.