Mid-Week Macro (8/6/2025)
The S&P 500 continues to remain strong, closing today at 6345, and near an ATH. GDP was 3% in Q2. Those two numbers continue to keep Wall Street in a bullish mood. However, the NFP (non-farm payrolls) numbers last Friday got everyone’s attention. Only 73K new jobs were added (and it will likely be revised lower), and downward revisions for May and June were stunning, taking both to sub 20K jobs added. The jobs market has clearly weakened. Add to that the tariffs put into place in August by Trump that will average around 15% from here forward. How much longer can the S&P trend before correcting? And how much will it correct? We can expect at least a 5% correction in the coming weeks, is my guess.
Gold continues to correlate with the stock market. They have been strongly correlated since Q1 2024. Silver has decided to join the party, with spot closing today at $37.86. Investors have noticed silver trending higher and have decided to buy the gold/silver miners. The HUI closed today at 470. That is a cycle high. Silver has been creating headwinds for the HUI, but at $37, it is hard for investors to ignore. Plus, we have had several Qtrs now of solid returns by gold miners. Q2 results have been especially strong, with FCF margins at around $1250 per oz. Agnico Eagle closed today at $135, up 80% in the past year, after a blowout Qtr with huge FCF margins.
Has the bull market in gold/silver miners started? It sure feels like it. That said, I expect this bull to do some bucking. A lot of investors have been jumping on the mo-mo train. They won’t get an easy ride. We can expect volatility and some significant corrections. Hold on to your hat. That said, any dips should be bought because the bull market in gold/silver miners will have legs. I expect it to last 24-36 months, with gold reaching $5K and silver $100. Once silver gets over $40, we can expect some massive moves upward. However, before we get those massive moves, I’m expecting a correction, led by the S&P 500 downward. In fact, I’m expecting the S&P 500 to crash at least 20% between now and year-end.