Friday Recap (5/29/2026)
Current (Last Week) -- (% from ATH | ATH)
AU: $4,543 ($4,509) -- 20% from ATH ($5,608)
AG: $75 ($75) -- 38% from ATH ($121)
HUI: 763 (727) -- 23% from ATH (986)
DXY: 98 (99)
S&P 500: 7,580 (7,473) -- At ATH (7580)
10-Year: 4.4% (4.5%)
Trump decided not to bomb Iran this week, and I don’t expect him to next week either. What would bombs accomplish? Nothing. If Trump wants to force the Strait open, it will require ground troops, and I don’t think he has the willpower for a ground war. Iran knows this and is not giving up control of the Strait. The outcome of the war comes down to one thing: who controls the Strait. Which country has the willpower to control it? The answer seems obvious to me: Iran.
So, we know the outcome. What we don’t know is how long Trump will attempt to negotiate until he goes home. When does he declare that the war is over? My guess is sometime in June, but it could linger. In fact, Trump might decide to escalate the war and drop a few bombs. That would be a mistake — and likely would crash the stock market.
I expect the war to end soon. That will lead to a rising stock market, along with rising gold/silver/miners. The question is, what comes after this whoosh higher? My guess is an opposite whoosh down in everything sometime between mid-August and mid-October — because of seasonality. The S&P will likely crash at least 10% and perhaps more than 20%. Gold, silver, and the miners will drop about the same levels, and will be highly correlated to how deep the S&P drops.
Some TA analysts think gold could drop to $3,500. While I think that is in play, I’m not expecting a crash of that magnitude for several reasons. First, gold is in an epic bull market with strong global demand. I expect it to get a strong bid below $4,200. I think we can expect the next cycle low to land somewhere around $4,200, and silver around $60. It’s possible that the coming run in gold/silver from the end of the war could lead to a breakout in both. If gold gets above $5,000 and silver above $95, then we might not see these cycle lows.
So, to conclude, the wildcard is if Trump escalates the war in an attempt to open the Strait. The other wildcard is if Trump maintains the blockade. Both of those outcomes could lead to a near-term correction in the S&P 500, gold, silver, and the miners. I would put the chance of one of those two wildcards at 30%, and a 70% chance that he ends the war and goes home.
