Yesterday I made an update asking and attempting to answer the question of what will gold stocks do if the stock market gains a continued bounce on relief from terrible sentiment. That was due to the recent rise in gold stocks while broad stocks declined.
It turns out that was a useless update because the market is choosing to react very badly to news it already knew was coming. The man in charge is throwing spanners and monkeys all over the world.
Initially at least, the precious metals are reacting negatively right along with everything else. So, again initially at least, the theory of an inverse reaction to the stock market is off the table.
I am not going to get into too many details, other than to note that our 2001-2004 analog is ramming into place for day at least, and potentially much longer.
The US dollar, the devaluation of which may be Trump’s ultimate goal (whether he realizes it or not) is getting smashed and the Gold/Silver ratio is smashing upward. Hence, the Gold/Silver ratio and USD are indicative of that macro phase from 2 decades ago.
If this proves out for more than a day or week – as the chaos of a man who may well be pulling reciprocal tariff figures out of his ass – we will be strongly considering the 2001-2004 analog and a perhaps excellent buying opportunity in gold (for those who don’t have it), silver and the gold miners.
For now, let’s sit back and watch the festivities. The macro is finally in motion, which to me is way better than some robo trend supported by inflationary policymaking, like last year’s fiscal operations. Meanwhile, this is going to take patience and that other word I’ve harped on over the years, perspective.
