Friday Recap (3/28/2025)
AU: $3084 ($3023- Last Week Spot)
AG: $34.07 (33.00)
HUI: 359 (352)
DXY: 103 (103)
S&P: 5580 (5662)
10-Yr: 4.2% (4.2%)
Oil: $69 (68)
The dollar (DXY), 10-Yr bond, and oil all spun in place this week. The S&P 500 tried to rally and traded over 5700, but then it fell back today, closing near the all-important 5500 level. As long as we are over 5500, Wall St will pretend that all is well. Once we fall below this level, it gets dicey. Next week will be interesting after Trump activates the next round of tariffs. It is rumored he will apply 25% tariffs on all imported autos. That is bizarre. They even apply to GM and Ford vehicles made in Canada and Mexico, and all car parts (which are used in US assembly plants). If he does not back down, I would expect the S&P close next week below 5500.
There are several scenarios that could play out, but the bottom line is that the economy is slowing, and these tariffs won't help turn that around in the near term. Plus, nearly every sector of the economy is deteriorating. What is going to turn that around? Plus, Trump's DOGE team announced their goal is to cut $1T in government spending. That is effectively the opposite of government fiscal spending stimulus. Trump is putting on the brakes. He is doing this at the same time the economy is slowing. When does Wall St figure out a recession is coming?
If you read my stuff, you know that I firmly believe that the most important criteria for a bull market in gold/silver miners is a fear trade. I've been proven correct. The gold miners have large margins right now, yet they are not getting valued for those margins. What's missing? A fear trade. When did the gold/silver miners do well in the past for an extended period? Only the 1970s and 2000s. Guess what happened during those decades? Economic turmoil. Thus, that's what we need, and that's what's coming.
Once the S&P is below 5500, the fear trade will begin to ignite. I expect gold, silver, and the miners to drop during this initial sell-off down to 5000. The only question is when does gold bounce and decouple from the S&P 500? My guess is $2800. I doubt that $2900 or $3000 can hold, but we could get lucky. If $2800 doesn't hold, then it will be time to buy to the bottom. I doubt we will see a $26xx handle, but $27xx is in play. For silver, I expect to see $28, plus or minus $2. For the HUI, 280, plus or minus 20 points.
