Mid-Week Macro (3/19/2025)

Mid-Week Macro

1) The stock market has been trying to bounce this week, with the S&P 500 closing today at 5674. Gold keeps trending, closing at $3052 (spot). Silver continues to lag at $33.83. The HUI has gotten above 350, closing at 357. All that is left is for silver to break out above $35. Can it reach $35 before April 2nd? I doubt it. Also, can silver rip higher with a fear trade? My guess is no.

2) The FOMC met today and, as expected, did not cut rates. The dot-plot graph shows that they plan to cut soon. This caused the stock market to rally today up 1%. Plus, Powell said that he is not worried about tariffs causing inflation. This harkens back to his infamous statement that inflation is transitory. He also said that he does not expect a recession, another statement he will likely regret, and soon. I think we might get an emergency cut as early as April if stocks crash and Trump refuses to reduce the tariffs.

3) I expect Trump to keep the tariffs in place. He clearly wants to use them to change the US trade policy, and since he only has one term, his time is limited. He can’t delay them anymore. He has to get on with it and see if they work. I think he is playing with fire, and not only will the stock market crash, but we will get a Lehman-type credit event. All hell is about to break loose in early April.

4) It’s possible gold could continue trending higher in April, but I expect a 5% to 10% correction if the tariffs are not reduced. My gold target is $2800, silver at $28, and the HUI at 280. I hope they are much higher. I also think these bottoms will occur between 5200 and 4800 on the S&P. The key level for the S&P is 5500, and once below 5400, it will get precarious.