Friday Recap (4/11/2025)
AU: $3236 ($3036- Last Week Spot)
AG: $32.23 (29.56)
HUI: 390 (325)
DXY: 99 (102)
S&P: 5363 (5074)
10-Yr: 4.49% (3.99%)
Oil: $61 (62)
Last week, Trump proclaimed Liberation Day and implemented high tariffs on most countries. The stock market proceeded to crash, and closed last Friday at 5074. Gold and silver also dropped significantly. On Sunday night, long-term interest rates began to explode higher, rising from 4% to 4.5% in a matter of hours. The bond market is much more important to the financial system than the stock market. Trump didn't blink when stocks crashed last week, but bonds? That was too much pressure to withstand. Trump quickly blinked and delayed the tariffs for 90 days, except for China (where a 100% tariff war rages).
The S&P immediately bounced (9.5%!) on the tariff pause, and gold ripped higher. However, the 10-year bond rate remained stubbornly high. Also, the dollar (DXY) fell, closing today below 100. Trump's tariffs are causing all kinds of volatility in the markets. What's next? My guess is that Trump is locked into his tariff strategy and won't be backing down. He's giving the market 90 days to prepare. In July, when tariffs resume, or perhaps before, the S&P is going lower, as will GDP. This is an economic mess, and it's going to get worse. Get ready for a recession.
Gold was up $200 this week ($3036 to $3236). That's a signal. A big signal. Gold had its first $100 candle this week. That was the bell ringing. I've been trying to figure out the floor for gold. Before this week, I had it at $2600. Today, I'm raising it to $2800. While I don't expect the floor to be tested, that's as low as I think is possible for 2025. If the floor is unlikely to be tested, then the gold miners are in very good shape. That's why investors bought them this week. The HUI ripped to 390, which is a clear breakout. My confirmation for that breakout is to remain above 370 for two weeks. I don't expect 370 to hold in this type of volatility, but fingers crossed that it does (we want to stay out of the dreaded HUI bear channel).
I have said repeatedly that the most important data point for gold/silver/miners (all three) is the S&P 500. We still need the S&P to get below 5000 and stay there (for at least two weeks) to create a fear trade. The move into miners this week was not a fear trade. It was a FOMO trade, whereby the FCF margins were simply too huge to ignore. In addition to the S&P, we need silver to join the party. Until silver gets above $35, we will be waiting for confirmation. For this reason, beware that this is a possible bear trap for the gold/silver miners, which could easily retrace 10% or 20% very quickly.
I'm hoping that 5500 holds as overhead resistance and that next week we get a lower high in the S&P below 5300. We need the S&P to break down and get below 5000, and remain there. That is the fear trade that will drive the HUI to 1200 to 1600 over the next 36 months. That is what we want and need if we are holding gold/silver miners. There won't be any champagne corks popped until we get below 5000 and silver gets above $35. And don't be surprised if we get one more significant correction in the HUI, back into the 10+ year bear channel.
