Mid-Week Macro (8/19/2026)

Mid-Week Macro

The S&P 500 closed today at 7707, not far from an ATH. The Fed intervened in the bond market after the 30-Year bond reached 5.3%. That seemed to be the level where the Treasury Secretary decided it was high enough. This comes on the heels of last week’s Japanese currency intervention, which also included some money printing. The dollar (DXY) dropped to 98. Plus, the yield curve flattened a bit. All of these factors supported gold, which ripped $175 higher today.

So, this $175 move in gold was driven mostly by technical factors. That’s okay, but we want gold to rise from a fear trade. It’s amazing that the HUI has ripped to 825 without a fear trade. It’s also amazing how cheap the gold/silver miners remain. When the fear trade does arrive, the miners have a long way to go to get overvalued.

All of the TA (technical analysts) guys think gold and silver have broken out from their 7-month corrections. They might be right, but until we get to mid-October, I think we could see a correction back down to retest the lows. I want to be wrong, but the S&P has a plethora of bad factors at the moment. If we don’t get a correction before November, I’ll be surprised.

The good news is that once we get to November, the odds are excellent that gold and silver make a surge. Plus, 2027 looks much better than 2026 for gold and silver. The economy is a wreck, and will only get worse. The inflation genie is not going back in the bottle, and money printing will continue. The Fed will try to control higher long-term interest rates, but it won’t be easy. They will also try to keep the economy from slipping into a recession. That also won’t be easy. There is only one outcome, and everyone knows where this leads. It won’t be pretty.

For me, the only question is, when does the recession begin? Q4 or 2027? Stay tuned. I expect the trigger to be the stock market. What will trigger the stock market is a mystery, although we already have several possibilities: oil/diesel prices rising, Japan, higher interest rates, AI rolling over, consumer-related issues.