Friday Recap (2/21/2025)

AU: $2935 ($2882- Last Week Spot)

AG: $32.44 (32.13)

HUI: 320 (325)

DXY: 106 (106)

S&P: 6013 (6114)

10-Yr: 4.4% (4.4%)

Oil: $70 (70)

As I have said, the S&P 500 is currently the most important number for gold and silver prices, and all we really need to follow. The S&P was down 100 points, gold was up $50, but the HUI (gold/silver miners) was down 5 points. In other words, the miners are currently not following gold higher. The HUI closed at 320. The average FCF (free cash flow) multiple for gold miners is between 6 and 7 (it should be double digits). The Qtrly earnings this week from the gold miners was excellent, yet the HUI went down! The FCF runrates (the amount of free cash flow expected at current gold prices) are currently massive for nearly all gold producers. The margins are averaging around $1000 per oz.

Investors believe these gold prices are coming down and refuse to re-value the gold miners with a higher multiple. The multiples should be double what they are, which means that nearly all of the gold miners are trading at 50% off. Some of them, like B2Gold, are trading at 70% off. I haven’t seen valuations this low since 2009. Coeur Mining is trading at a 6 FCF multiple with a $600M FCF runrate. That’s insane. Coeur’s share price should double when silver reaches $37.

While the miners are all cheap, that doesn’t mean they are at the bottom. I expect the S&P to crash at some point, which is still ahead of us. Until we get through that crash, we need to be aware that at least one more rug-pull is likely ahead of us. However, if Hecla or Coeur go below $5, you might want to buy them to the bottom. I doubt that either of them will see $3.50 again. Sub $4 will be a gift.

I have raised my gold target to $5K from $4K, and increased my floor target to $2500. While my floor is $2500, I expect $2600 to hold and think that $2700 has a good chance of holding. I do not think $2800 can hold. My silver target remains $26 to $27 for now. I think this current run in gold will get above $3000, but not $3100. Expect a gold cycle high in March, after the current 8-week run. The S&P might have topped out this week, but probably not. Next week will be interesting. Can 6000 on the S&P hold next week? Stay tuned.