Mid-Week Macro (12/11/2024)

Mid-Week Macro

1) Gold has been strong this week. With spot closing today at $2718. Silver has also been strong. Closing today at $31.89. The miners continue to lag, with the HUI at 317. Part of this reason is that this is tax-loss selling month, which always puts downward pressure on the miners. The dollar went up this week to 106.4. So, not even a strong dollar slowed down gold.

2) The main story remains the bull market on Wall Street, with the S&P remaining above 6000, closing today at 6087. With then strong bullishness on Wall Street, it’s hard to get them interested in the gold/silver miners. Newmont is at $42, which is terrible. It was at $54 in October. Nobody is going to care about the gold/silver miners until with him my targets: $3000 gold, $35 silver, and 350 HUI. We could be waiting awhile.

3) The big mystery this week was the strength in gold. Why is it trending? It’s not a weaker dollar, and it’s not inflation. Nor, is it a fear trade. Is gold trying to tell us something, or is simply following the S&P 500, which it has been doing all year? Stay tuned. I’m puzzled by the bullishness on Wall Street, so perhaps that why gold has been strong. The S&P 500 is trading with forward PE at 22. It’s a frothy market, yet nobody is worried. Plus, the economy is slowing, which is a bad omen. Everyone seems to believe that Trump is going to be positive for the economy. We’ll see. He has some serious issues to deal with, the largest being the budget deficit and correlating interest expense of $1T.