Mid-Week Macro (11/27/2024)

1) The S&P 500 has remained strong this week, closing today at 5998. I think it will finish the year strong. This is bad news for gold, silver, and the miners, which remain trapped. All they can do is follow the S&P. Inflation has been trending down or flat, GDP has remained strong, and consumer spending has remained strong enough not to create any concern on Wall St. Plus, you have the bullish sentiment of a Trump Administration, which will be business-friendly. So, we are in wait mode until January.

2) Gold crashed $90 on Monday, but rebounded on Tuesday and Wednesday, and closed at $2630. I think $2600 to $2700 is the right area for gold to end the year. Silver is lagging, closing today at $30.03 and trading below $30 for most of the day. The HUI is also lagging, closing at 300, which is pathetic with gold at $2600. The miners remain on sale. The Aussie 8, which all have strong margins and good balance sheets, are trading with an average FCF multiple of around 5. That's ridiculous. There are many producers trading below a 5. Newmont is trading at a 10. Everything is half off for Xmas.

3) I think gold is trapped in a range of around $2500 to $2800 until the S&P tops out. That could take a few weeks or a few months to reach. Then, once it tops out, I expect a correction down to $2350 to $2400. I see no reason to be on the sidelines waiting for this low. Instead, I will be accumulating shares from now until the HUI reaches 350. At 350, I will stop buying and get ready to be a seller as the bull market in gold/silver miners begins. Once above 350, I expect the HUI to rip to 500, and then steadily trend to 1500 over the next 2-3 years. I consider this the last buying opportunity, with a window that could quickly close, or potentially remain open for several months.