As per much of 2025 so far, we have a political event in progress that is altering markets. And it has nothing directly to do with Trump. Go figure.
I do not report the news here. I report what I think the effects of the news will be on our market positioning. The news is of Israel’s bombing of Iran and expected retaliation.
First and foremost, if you’ve read or heard me over the years you know that a rise in gold directly due to war, terror or other non-monetary things that humans do to each other will usually have a very limited effect on gold to the upside, time-wise.
That is because the knee-jerks, the dumbest money, fly in because “OMG… Israel bombed Iran!!! BUY GOLD!!!! (because… reasons)”. It can act as an exclamation point on a rally that is already mature.
If I was getting guarded on the precious metals rally to begin with, I am more so now. Gold is testing its highs as it gets the war bid.
Gold stocks are doing the same with GDX at 54.45 in pre-market.
Here I keep in mind the target zone for HUI (500 +/-), which is nearby. Risk/reward was already not nearly as good as it was in January and now, price-wise, it is just not good (if the target is correct) after all that rallying that has already taken place and only 18% theoretical upside left.
I am not telling anyone what to do. Especially those positioning for a longer-term bull market. I am noting that I established a target years ago and it is now nearby.
I already trimmed some gold stocks that had grown out of proportion to the portfolio and replaced them with others (GAU comes to mind, as a lagging technical buy). I will plan – likely today – to do more selling. Any riff raff added (e.g. GAU) will be released and I am going to consider selling items that I really like. Or at least trimming them. Hedging? Maybe. But that gets tiring. Cash will be raised.
I added silver back yesterday and may sell that (PSLV) too. Silver is not doing much in pre-market, but the Silver/Gold ratio is logically getting hit again this morning on the news. It is time to question “was that all there was?” to the SGR’s upside. It did after all spike up into the target zone.
Speaking of spiking, that is of course what crude oil is doing this morning. I can’t see how I will not be selling and taking well earned profits on my USO positions on this war spike. The target for USO was 78 per the original NFTRH+ update and it is at 80 this morning. I’ll take it.
Meanwhile, the US stock market (SPY) is easing a bit to test support. If I do any bull stonk selling it will not be because of war. Just as a gold spike on war is usually ill-fated, so too would be a stock market drop.
Bottom Line
Since we were already in the late stages of a bullish view, a spike in gold and the miners could be the beginning of the end (just my favored analysis, not verified by my crystal ball because it broke years ago).
Crude oil is spiking as usual during Mid-East war/terror and I am going to sell into this.
The stock market is not doing much. I will not sell positions because of this, but will sell for technical or any other reasons I naturally would have, if applicable.
