Weekly Macro Notes (6/26/2024)

Weekly Macro Notes 

1) The stock market remains strong. The S&P reached another ATH at 5505 this week. I think Wall Street is experiencing a final melt-up from the 15-year bull market. I am expecting a 3-year correction to begin soon, which will usher in the expected recession. 

2) The HUI closed at 267 today, which is pathetic. Newmont is at $41. It traded at $84 during its last cycle high in April 2022. Until Newmont gets bought by Wall Street, the HUI (and most gold miners) will languish. The good news is that gold has held $2300 since early March. At $2300 gold, Newmont has high margins, with an AISC around $1450 and break-even cost around $1700. Newmont should double quickly (and ignite the gold miners) if gold goes to $2500 and stays there for a month. That would push the HUI above 400 and ignite a bull market in gold miners (as well as silver miners). 

3) France and Japan have both been experiencing a mini-crisis with their financial systems. France has a problem with its government bonds falling in value, and Japan has a currency problem with the Yen falling in value. Neither problem has blown up, but they are lingering and could blow up. I have been expecting a black swan, but nothing has appeared. July and August will be interesting. 

4) Silver could not hold $30 this week, and the spot price closed below $29 today. I’m not concerned because the important metal is gold and it remains strong. Until gold drops below $2070, it will remain in a strong position. Many banks have been increasing their targets for gold, with several expecting $2700 by year end. Note that $2700 gold means a 500 HUI, which is a 100%+ move in miners.