Mid-Week Macro (5/27/2026)
Mid Week Macro
The S&P 500 continues to roar, reaching another ATH today at 7520. The bullishness on Wall Street has become so extreme that gold and silver have been languishing. Gold closed today under $4500 at $4432 and is now down 21% from its ATH in January. Silver closed at $73.81, and is down 39% from its ATH in January. The HUI closed at 732, and is down 25%. The gold/silver bull is clearly bucking, with many posers exiting their positions.
The AI trade clearly has the momentum at the moment, and gold/silver are taking a backseat. That will likely remain the situation in the near term. I always expected a lower low for gold and silver in Q3, so this correction is just early. In fact, my expected next cycle lows remain $4200 to $4400 for gold and $58 to $68 for silver. So, the next run will likely be a false breakout, unless we reach breakout levels of $5,000 for gold and $92 for silver.
Until gold exceeds the S&P 500, I will remain bearish, expecting more deep corrections. We need the gold/S&P 500 ratio to reach .8 to start getting excited ($5,000 / 6200 = .8). Until then, we can build our portfolios and stack shares. Now is a good time to stack, with many miners trading near or below their 200 DMAs. At those levels, we won’t be buying a deep knife cut. I doubt the miners will drop 20% from here, and 10% is more likely, which is a nothing-burger for miners.
The war in Iran is winding down. Iran has the upper hand by controlling the Strait, and I doubt that Trump has the will or patience to force it open. He knows that even if he tries to force it open (with ground troops), he might fail. The risk is too high. He has no other choice than to walk away. Right now, he is just bluffing, trying to get the best deal possible. It’s going to be an ugly deal (or no deal), with Iran in control of the Strait.
As the war ends, the S&P is going higher, as will gold and silver. Then we wait to see what comes next in August and September, leading up to the midterms, where Trump likely becomes a lame duck, and Congress becomes gridlocked.