Weekly Macro Notes (7/3/2024)

Weekly Macro Notes

1) The stock market made another ATH this week. The S&P closed over 5500 for the first time. I think it is topping, but I thought it was topping at 5200. The economy is cleary slowing. The Russell 2000 is flat for the year indicating a weak economy. This performance in the S&P 500 is a bubble IMO. We might go a bit higher, but it is ripe for not only a correction, but the end of this 15-year bull market. 

2) Gold and silver were both up big today, closing at $2350 and $30.50. Gold was up $30 and silver up $1. The HUI closed at 276, which is near the current cycle high. This is strange behavior by gold, with the stock market at an ATH and the dollar at 105. It’s odd to see a strong dollar and strong stock market along with gold near its ATH. What is gold trying to tell us? It clearly isn’t being driven by inflation, which has been failing. The answer is uncertainty, which bodes well for where gold is heading, which is higher. 

3) Before today’s PA (price action), my gut feeling was that $2200 is the new floor for gold. And any gold corrections under $2000 will be short-lived. Gold is clearly trending higher and wants to go to $2700 or higher in the next 6-12 months. Silver will follow. 

4) I still think gold/silver and the miners will get smacked in the face once the selling begins on Wall St. The good news is that I don’t think it will be deep correction. The unknown is whether we get above 300 on the HUI before this correction arrives. I think the play here is to buy miners now and also be prepared to buy the final dip. I have two stocks that I am going to buy when the S&P reaches 4800, but most of my free cash will be spent on gold/silver miners that are still on sale.