Mid-Week Macro (2/12/2025)

Mid-Week Macro

1) The S&P has remained above 6000, but Wall St is starting to get nervous because the MAG-7 has become the LAG-7. Only Meta is up for the year. Without leadership from the MAG-7, it won’t be easy for this market to go higher.

2) Gold remains on fire, with the spot price currently at $2907. The TA guys think that the gold miners are going to break out. They might be right. Barrick reported today with good numbers and pushed the HUI to 337. If we get above 350, then all that is left for confirmation is silver, which continues to lag at $32. I doubt that silver can get to $35 before the next correction comes (and thus the fake-out).

3) I expected February to be a good month for the S&P, gold, silver, and the miners. I continue to believe this is a fake-out and not a breakout, but if gold decides to lead, then it could be a breakout. That would be unprecedented, but the untenable US debt situation is starting to become apparent.

4) The CPI for January was released today. It was 3%, and higher than expected. It’s almost as if gold has sniffed this out. Powell and the Fed are trapped. They want to fight inflation, but they can’t contain it. Now a recession is coming, and they will have to abandon their inflation fight to focus on preventing an economic meltdown, which clearly will have a higher priority. Does it begin in March? Stay tuned.