Weekly Recap (2/20/2026)

AU: $5105 ($5041 - Last Week) -- (Jan1: $4350, YTD: +17%)

AG: $84 (77) -- (Jan1: $70, YTD: +20%)

HUI: 893 (871) -- (Jan1: 700, YTD: +28%)

DXY: 97.7 (96.8)

S&P: 6909 (6836) -- (Jan1: 6902, YTD: 0%)

10-Yr: 4.08% (4.2%)

Oil: 66 (63)

The big news this week was tariffs. The Supreme Court ruled that Trump could not use the Emergency Economic Powers Act to issue tariffs. Trump was rolling the dice. That law had never been used for tariffs. Trump immediately invoked Section 122 of the Trade Act of 1974 to issue a blanket 10% tariff on most imports, although many products are exempt. This will get him most of the tariff money he wants. However, he can only use Section 122 for 150 days unless Congress extends it. Will they pass a tariff law? Got popcorn? I doubt it. This 10% tariff expires July 20th.

The Supreme Court ruling was significant. The two moderates (Roberts and Barrett) both voted against Trump. I think that trend will continue. Trump lost this court battle and will probably lose a few more. This is something to keep an eye on.

The stock market was happy with the ruling (many companies got a reprieve) and closed the week near an ATH. Gold was also happy. Gold likes uncertainty, which this ruling created. Plus, gold likes a higher stock market. Lil Sis (silver) followed her Big Brother (gold) higher. Gold closed the week above $5100 and silver above $80. While those are strong levels, expect more volatility. If the stock market has any weakness in the near term (likely), gold and silver will likely get smacked.

The UST bond market was damaged to a small degree by this ruling. Less government revenue means more pressure on UST bonds. It also creates uncertainty for tariff revenue in 2027. The main reason gold is at $5100 is because of the fragility of the UST bond market. Gold is trending higher because it is currently the only strong replacement for UST bonds for foreign country reserves. It is also increasingly becoming a must-own hedge against uncertainty. Those facts are unlikely to change anytime soon.

Now we head toward March and April. I doubt we get through those two months without some type of correction in the S&P 500. The final battle is looming, which is the onset of the fear trade. We continue to wait for that battle. How far will gold drop before it decouples? My guess is somewhere between $4500 and $4700. Once we reach this next gold cycle low, how long will we have to wait for the next ATH? Could we reach an ATH before this battle? Sure. We are now in a period of uncertainty for the near-term direction of both gold and the S&P 500. The only certainty (IMO) is that gold will find a way to go higher this year, and silver will follow. But it won’t do that in a straight line. Buckle up.