Friday Recap (6/20/2025)
AU: $3367 ($3431- Last Week Spot)
AG: $36.01 (36.23)
HUI: 421 (432)
DXY: 98.4 (98.1)
S&P: 5967 (5976)
10-Yr: 4.37% (4.40%)
Oil: $73 (72)
It was a quiet week, other than the missiles flying back and forth between Israel and Iran. The Fed had its June meeting, but it was a nothing-burger. Gold fell $65, but silver held $36 for the second week in a row. The GSR shrank to 93, but remains highly elevated. The HUI was down 10 points, so the miners were flat. The S&P was flat, as were the 10-Yr rate and oil. Summer doldrums? I doubt it. More like the calm before the storm.
Many analysts are uber-bullish silver right now with big targets in the near term after the breakout above $35. I still think it is a near-term bull trap, even after this week's strong PA (price action), trading above $37. I'm expecting the Trump tariffs to create shock#2 in July. Everyone expects Trump to back off his tariff threats and be Mr Taco (Trump Always Chickens Out). I'm expecting at least one trade war in July, and likely more than one, that gets Wall Street's attention. This should push the stock market back down to retest the highly important 5500 level. Can gold and silver fade this selling pressure? My guess is no.
My thesis remains that the HUI will not break out into an extended (multi-year) rally until the fear trade arrives. The top of the 10-year correction channel for the HUI is 365, and today it is at 421. You could make an argument that it has already broken out. However, I expect to go back into that channel one more time. My target correction is 325 to 350. The good news is that this will be a higher low, and we will bounce out of that correction and head to 1500 (over the next 24-36 months). Thus, I'm not concerned about the coming correction. In fact, we need it for the fear trade. That is what flips sentiment from weak to strong for gold/silver miners.
Trump is considering bombing Iran. If he does, that very well could be the trigger for higher oil prices if Iran blocks the Straight of Hormuz. If that happens, the stock market could crash. We could be at sub 5500 in a week. If he decides not to bomb Iran, he will likely implement higher tariffs than Wall Street wants in early July. For instance, today there is a 25% tariff on all imported cars and trucks from Europe and Asia (ask Grok). That is not going to change in July, and it could get worse! The problem with tariffs (in the near term) is that the economy is already slowing, and they only make matters worse. I think tariffs are the recession trigger.
