Mid-Week Macro (9/25/2024)
Mid-Week Macro
1) The S&P continues to remain strong, closing today at 5722 (near an ATH). Gold has correlated 1 to 1 with the stock market all year and is also near its ATH at $2657 spot. Silver has been strong this week, trading above $32 and closing today at $31.84 spot. The miners continue to lag, although the HUI closed today at 334, and is on the verge of breaking out. My breakout levels are close to being exceeded. I wanted to see Newmont above $55, which is where it closed today. If the HUI gets above 350 and silver above $35, I think we have the beginning of a bull market in gold/silver miners.
2) While most analysts are ecstatic with the PA (price action) in gold and silver, you can’t be excited about the PA in the miners yet. The miners are a flashing red light. I think they are telling us to be careful. I am not expecting a smooth ride for silver to run to $40. However, the good news is that the floor for silver keeps rising. It is either $25, $26, or $27. And some analysts think it is now $30. The only way $30 holds is if the stock market continues to melt up, or the BRICS cause gold to leap by announcing a gold-backed crypto in October at their meeting.
3) The S&P 500 is really the only number that matters. Gold is going to follow it, either up or down. I expect the S&P to crash in Q4 (after Harris wins), so the odds favor a sell-off in gold/silver/miners. But that sell-off is likely to be shallow, with a quick rebound. I’m not worried about a deep correction in gold, which wants to go higher. My target remains $2700 at year-end for gold and $40 for silver. That should put the HUI around 400, but before we get to 400, expect to see a cycle low around 265 to 275.