Mid-Week Macro (7/16/2025)

Mid-Week Macro

The S&P 500 has remained strong. The CPI came in soft for June, which made it easy for stocks to remain strong, since lower inflation makes it easier for the Fed to cut rates soon. Wall Street remains uber-bullish with no fear of a recession this year. I still think Trump’s tariffs are going to take their pound of flesh out of the economy. That has not happened so far, but let’s see what happens over the next few weeks.

No one on Wall Street will deny that they economy is slowing, but they conversely believe that all we need is lower rates to fix that problem. Ironically, the damage to the economy is not easily fixed. The banks have a commercial real estate and balance sheet problem (from bond losses). Consumers have a cost-of living problem. Housing has an affordability problem. Autos have a tariff problem. How do these problems go away?

I remain uber-bullish that gold is trending to $5,000 and nothing is going to stop that outcome. But the path likely won’t be in a straight line upward. I’m expecting a correction soon, where gold drops to around $3,100 before heading higher. I hope I am wrong and perhaps $3,200 hold, but I don’t think we will get that lucky. Expect, to get smacked in the mouth if you are holding gold/silver miners at some point in the near future. But that smack down won’t last long, perhaps less than a month before gold bounces.