Friday Recap (9/6/2024)
AU: $2497 ($2502 - Last Week Spot)
AG: $27.97 (28.81)
HUI: 293 (313)
DXY: 101 (101)
S&P: 5408 (5668)
10-Yr: 3.7% (3.9%)
Oil: $68 ($73)
And so it begins? In my newsletter last week, I said to prepare for a rug pull. The combination of seasonality, the looming election, a slowing economy, and an assortment of bad macro data, all pointed to a looming rug pull in everything except the dollar (flat for the week) and bonds (up for the week). Gold managed only a $5 drop and almost got a green candle. Gold has been leading since March, with only one moderately bad month back in May. Gold is the story, and wants to go higher (and it will).
I also said the only data point to watch is the S&P 500. That is going to be the key to everything. Above 5200, and Wall St will remain bullish. Between 5200 and 5000, and nervousness will arise. Below 5000, and selling will begin, along with heightened anxiety. Below 4500, and it's Katy bar the door as the rats jump off the ship. I expect this sell-off to last 3-6 months before bottoming around 3000. The best-case scenario is that we hold 5200 until the election, but then we go down.
The S&P was down 250 points this week on bad economic data (beige book, retail, and jobs). The August jobs numbers out today weren't terrible, but a slight miss was enough to get Wall St's attention. Everyone knows the economy is slowing, but nobody wants a recession. Wall St is trying to talk itself into a soft landing, but they are dreaming, and they know it. They are praying that the rate cut on September 18th will propel the economy forward. Good luck with that, with the election around the corner. When Harris wins (this won't be a fair election), corporations are going to panic. As I have been saying, Q4 is going to be wild (for all the wrong reasons).
The miners (DXY) are at 293. That's not a bad place to be when the rug pull occurs. If 250 holds, I'll be happy. That will mean that $2200 gold held. If that is as far down as they can push gold, it will rebound back to $2500 as fast as you can say lickety-split. My target for gold is $2200 to $2300, and I expect it to be closer to $2300 than $2200. As for silver, my target is $25 to $26. It will get hammered because of its economic correlation, but don't worry; it will head back up once gold bounces. If you own silver miners, be prepared to get rug pulled, or to buy the dip.
