Mid-Week Macro (6/18/2025)

The news this week was the exchange of missiles between Israel and Iran, which has been extensive and ongoing. The stock market has ignored it and remains near an ATH, with the S&P 500 at 5980. Gold has also shrugged it off, closing today at $3378. The surprise for the week is silver at $36.69. The miners (HUI) have been flat at 425, with no excitement yet. Normally, when a chart like silver breaks out ($35 was clearly resistance), you get follow through. If silver closes above $35 on Friday, which seems likely based on its recent strength, that could spark follow through.

There is one problem with this move in silver, and that is the lack of a fear trade on Wall Street. No one on Wall Street is buying miners (Newmont continues to trade at a 9 FCF multiple. It should be 50% higher). Wall Street is quite content to stick with what has been working. I don't see how silver runs to $40 (or higher) until the fear trade arrives. It's never happened before. Normally, silver runs when the stock market is stagnant (a fear trade). For silver, this feels like a bull trap to me, with the next big move down and not up. The good news is that if the correction begins at this level for gold and silver, the miners will not be substantially battered. This will give investors more confidence in holding miners at this time, and more investors will enter as risk diminishes.

What correction levels can we expect? My guess continues to be a 5% to 10% correction in gold and a $3100 target. Silver and the HUI will follow gold, but will have more substantial declines. If silver closes over $35 this Friday, then my floor for silver will increase to $30. That is a substantial increase from my previous $27 to $28 floor. I continue to hold my gold floor at $3000. The HUI should hold 325, and with silver's recent strength, 350 is looking better and better as a floor.

Once this last correction occurs (triggered by a sell-off in the S&P 500), I expect a furious rally in gold/silver/miners, with the HUI ripping to 450 and then off to the races (trending to 1500 over the next 24-36 months). For this reason, we are running out of time to stack mining shares. Once we correct and then get back above 450, that's probably it. The train will be leaving the station. I will be a buyer until that outcome.