Mid-Week Macro (12/17/2025)
Mid-Week Macro
Gold (and now silver) continues to lead. The S&P 500 was down 1.1% today to 6721. NASDAQ was down 1.8%, close to the dreaded 2% down day. As I expected, NVIDIA is having trouble, closing today at 170, and a long way from its recent 212 high. I said that if NVIDIA can’t hold 185, it would likely crash to 150 (down 29%). It’s on the verge of that outcome. Meanwhile, gold is back above $4300, and silver is at $66, with both acting like powerful bulls (up 60% and 120% YTD and wanting to go higher).
Wall St remains uber-bullish, with cash levels at 3%. Bullish sentiment is actually higher right now than at any time in the past two years, when the S&P was up 25% back-to-back years. The naïveté is stunning. When you look at the macro data from a holistic/historical viewpoint, the data screams trouble ahead. This is the classic euphoric top, and will be obvious to everyone in hindsight. The two data points that stick out are the unemployment rate rising from 4% to 4.6% (in tandem with the 24-week period to replace a job), and housing prices dropping (along with inventory levels rising). You don’t get that in a strong economy. You get that in a recession.
We know how this story plays out. The stock market is going to crash. The only questions are when, how deep, and for how long. The wise move is to get out of the way. Conversely, the winner will be gold, which is where many investors will choose to hide. Silver will follow gold, and also be a winner. In fact, as silver retains its status as a monetary metal, it will outperform gold. The SGR (silver-gold ratio) has risen from 1.2% to 1.5% in recent weeks, heading to at least 2.5% and probably 3% or higher. Do the math. When gold reaches $5000, silver will likely reach $90 at 1.8% or $125 at 2.5%. My guess is that it will be in that range. The last high was 3.2% on 4/28/2011 ($49/$1530 = 3.2%). When gold topped out in 2011at $1920 on 9/5/2011, silver was at $42, which was an SGR of 2.2%.
Michael Oliver got me hooked on using the SGR instead of the GSR because the math is so easy. Multiply the gold price by 1% and then double it. You can do it in your head. Today, the gold price is $4332. At 1%, that is $43. At 2%, that is 86. That is where we are going. And if we get lucky, we might see 2.5% or 3%.
If it weren’t for Don and John, I’d still be living paycheck to paycheck; hopeless and afraid. I’m not a chrysophilist. I don’t believe that gold and silver are inherently superior to other commodities or industries. If I had a rational reason to move from precious metal miners to bitcoin stocks or tech companies, I would. But the evidence is clear. Silver and gold miners quadrupled last year, far outpacing the rise in gold and silver itself. Careful research and the ability to stay rational and adaptable has proven to make us fortunes that far surpass that of Bitcoin and even tech. I will eventually leave the precious metals industry (mid 2027) and focus on rare earths (when the West finally gets its shit together). Until then, let’s take a deep breath, transcend the media noise cycle, and make some serious money.