Friday Recap (5/24/2024)

AU: $2333 ($2414 - Last Week Spot)
AG: $30.31 (31.47)
HUI: 272 (286)
DXY: 105 (104)
S&P: 5304 (5303)
10-Yr: 4.4% (4.4%)
Oil: $78 ($80)

Let's review the numbers above. S&P, 10-Yr, and Oil all spun in place. It was a pretty quiet week, although the dollar was a bit stronger from Fed hawkishness and inflation fears. That seems to have triggered a gold and silver correction. Sadly, the rally in gold and silver came to a halt after a nice run that began in late March and lasted all of April and most of May. The HUI reached 291, and we needed 300 to start trending.

The gold/silver correction so far is less than 10%, but momentum seems to have faded. Gold reached a high of $2450 on Monday after another big open in Shanghai. Silver reached $32.40 on Monday. Gold could not hold Moday's level, which seemed to spook silver. Gold closed down more than $100 from Monday's high. Silver was down $2 from Monday's high.

I turned bullish in early April and remain bullish that the gold/silver/miner correction (that began in August 2020) is over. That said, I have not been able to enjoy this recent run. Yes, it has been encouraging, and I expect to get higher lows and higher highs going forward. However, until we get a risk-off trade on Wall Street, we are fighting an uphill battle. For instance, look at Newmont's chart and check its recent volume. No one on Wall Street is buying gold miners, and until we get a risk-off trade, they won't. Let me be emphatic: until we get a risk-off trade, we are not going to see $50 silver or $3000 gold. And those are the only levels I care about. Traders made some money in the recent gold/silver run, but I'm in this for the big alpha. I consider $30 silver as the starting point, not the finish line.

You may think I'm being too negative/bearish, and that gold is breaking out. But I can't help but feel we remain in wait mode, waiting for the stock market to falter and the economy to fall into a recession. That said, I do feel like we are running out of time to buy gold/silver miners on sale. I don't think the wait will be much longer for the risk-off trade to arrive. But until it arrives, I don't think we can claim victory. As an analogy, I doubt that Guanajuato Silver is highly confident today that they will become a $1B company. They will, but it's a bit early to have that expectation. There are still a few hills to climb, and we can't see the summit yet.

I'm sure some of you are thinking about potential looming corrections. I remain confident that gold will not break down. My worst case is $2000, and my best case is $2200 for the next cycle low. My expectation is that it will be somewhere in the middle. When? I have no idea. It could be next week or perhaps even all the way until August or September. I would like to get it out of the way, but we are waiting for the stock market to roll over. As for silver, it will follow gold. It looks like the floor for silver has increased from this recent run. My range is $26 to $28. I'm hoping $28 holds so that it can quickly retake $30. But it's really irrelevant. If gold is going to lead, then silver will follow. Sadly, Little Sis appears to have taken off her running shoes. I'm not sure when she will put them back on. We might get a 1 or 2-month pause.