Gold Is Coiled Up For A Rally While Silver And Copper Have Had Important Breakouts

Welcome to the start of the next great metals bull market. It is set up to be more powerful and longer lasting than the one from 2001 to 2011. Start your engines.

Trump’s strong letter to follow on tariffs got underway today. As expected, the 90-day pause was a failure, despite Trump and his crew trying to convince everyone that there was a long lineup of countries eager to sign up for trade deals. Instead they went with mean letters and tacos for everyone.

TACO (Trump Always Chickens Out) on his tariff tantrum sure is coming through, as he talks like a bully with all the cards followed by pauses. The bully tactics aren’t working, despite the promises by his team that they are, as trade deals aren’t easy. Even if both parties want to do a deal, less so when one side is being bullied and the other is doing the bullying.

It sure seems like trading partners are willing to roll the dice and take their time to see if Trump can withstand the pressure from Wall Street showing their displeasure for tariff tantrums or trade wars.

Apparently, he is the greatest negotiator ever and this is 4D chess he is playing.

What is happening while he is playing all his cards on the 4D chessboard, is he is creating uncertainty. Which gives company executives fits because they don’t know if tariffs are on or off, so they can’t make solid plans and hunker down.

During the first quarter earnings season, plenty of Wall Street companies suspended guidance due to economic uncertainty. I imagine the second quarter earnings reports will be much the same.

They can suspend guidance, but more troublesome for the economy is they have to halt purchases, hiring and other business activity. Which is not good when consumers are stretched to a breaking point and almost everything is becoming unaffordable.

Of course, the government statistics are showing everything is rosy on the economy and inflation. In addition, Trump is continuing to spend like a drunken sailor like he did in his first term. Following in the footsteps of Biden’s spending habits, he also seems to have kept all Biden’s government statisticians on to keep putting out fugazi numbers.

Meanwhile, Trump and Bessent keep trying to sell the idea that tariffs are paid by foreigners and aren’t a tax on Americans. Yet, surveys of businesses are suggesting that around three quarters of them are in fact passing the tariffs down the line. Of course they are, they are charged when they land in America and then someone in America has to eat them.

For a long time, the fake economic numbers, jobs numbers and inflation have been overstating economic growth and the health of the jobs market while understating inflation. At least in the initial reports, then revised in less rosy ways later when few are paying attention.

Which makes a lot of those so-called hard data numbers pretty meaningless. Even if the politicians and Federal Reserve folks like to pay attention to them, at least the initial reports, not so much the revised ones.

The surveys of consumers and CEOs are much more accurate at depicting the real economy. They don’t have the luxury of living in the smoke and mirrors show, they have to deal with the actual economy in real time.

Consumer surveys on the economy are at levels only seen during recessions, and they are also very concerned about inflation getting much worse. All the efforts by the Fed to tame inflation, after they thought it was transitory, are not working.

They kept the Free Money era going for much too long, which created persistent inflation. Now they have another problem, they know the economy is under pressure and inflation is heading higher, not toward their target rate. Which means they are going to have to face stagflation with no weapons to fight it.

When the Fed members are surveyed, at the past handful of meetings, they are consistently revising their estimates for economic growth down while increasing their inflation forecasts. They are predicting the same kind of stagflation that the consumer surveys are forewarning.

Trump, Bessent and others dismiss the consumer surveys and Fed prognostications as being leftist and anti-Trump. That is a harder case to make when looking at the surveys of CEOs on Wall Street and out on Main Street. Those folks are right leaning and are saying the same thing.

Actions speak louder than words, while Wall Street CEOs have suspended guidance due to economic uncertainty, they are also selling their stocks at elevated levels.

Despite the financial media and Trump’s backers talking about a V-shaped recovery in the stock market since the tariff tantrum, they are paying attention to the prices and not the volume which paints a different picture.

During the correction from February until early April, the volume was high and during the rally since the volume has been low. Which means that many who sold in the correction didn’t buy back in for the rally. Plus, the rally doesn’t have a lot of conviction.

Wall Street stocks were priced for perfection prior to the correction and are once again now. This is happening while CEOs can’t give guidance due to economic uncertainty and insider selling is high.

This is setting Wall Street up for another correction. I predict we will see Wall Street stocks chopping around between corrections and rallies for a long time.

The US debt market has issues as well, the bonds topped in September, then had a serious correction that pushed them down and yields up until January. Then they had a relief rally that fizzled out with a lower high in early April and have been struggling since. Which certainly looks like a sucker’s rally, that will be followed by renewed weakness.

They formed a double bottom in May, and since then had a tepid rally which looks to be petering out. As charts go, it looks like the current softness could test the double bottom and have another significant correction that pushes yields higher.

The bond vigilantes don’t seem to be interested in supporting Trump’s wishes for the Fed to cut rates. Can you blame them? Supply of US debt is extreme and Bessent is sending signals that he needs the banks to be allowed to leverage up and stablecoins to come to the rescue.

Trump’s efforts to bully Powell by bashing him with social media posts could very easily backfire. If he wants Powell to cut rates, he will need the buyer of last resort to get back in the QE business to manipulate the yield curves down with a buy, buy, buy policy.

It is hard to imagine that foreign buyers are going to be supporters while Trump is having a tariff tantrum. Trump is not a very smart bully, instead of picking his spots, he is hellbent on fighting a trade war with every trading partner all at once.

At the same time, he pushed through a big spending bill, which will drive the deficits to $2.5-3 trillion within a year. To allow this, the bill also cranks up the debt by $5 trillion, which is a stopgap measure that will likely only last for a couple years of deficits at the most.

If you thought the Death Spiral of Debt was bad under Biden, it is about to get worse. The debt is about to go over $40 trillion before Powell’s successor gets into office. Which means that the cost of servicing the debt is likely to reach $1.5 trillion much sooner than most think it will.

The bottom line is that the global debt and fiat currency system is broken from the top of the totem pole down. Trump has no intention of doing anything other than to make it worse with his big spending bill that allows him to spend like a drunken sailor and drive right through the debt ceiling to tack on another $5 trillion to the debt.

Which brings us to the US dollar. It has been in a correction for all of 2025 and is off to the worst first half of a year since 1973. Trump wanted a weaker US dollar, believing that would help boost exports and reduce the trade deficit.

Here again the trade war comes into play because he is fighting with all his trading partners who he is hoping will buy more. While doing that, he is losing sight of the reality that the American economy is reliant on imports.

He talks about fixing the trade imbalance with a lower US dollar, and tariffs, while selling the idea to his MAGA crowd that this will quickly bring jobs home.

Economics doesn’t really care about campaign promises. And even though the economic numbers can be manipulated to overstate economic growth and understate inflation, the real economy tells the actual story.

CEOs and consumers (as well as the Fed members) are much more concerned about the economy dipping into a recession while inflation rises. They are all predicting stagflation.

It is no coincidence that the US dollar is performing like it did just prior to the last bout of stagflation. Which I might add was very bullish for gold and silver.

Gold and silver are primed to go much higher, and the stocks even more. Not all of them of course. Focusing on the majors and mid-tier gold miners making plenty of free cash flow. And the junior gold miners that are increasing their production and decreasing their cost of production. As well as the developers with high-quality projects and explorers with important discoveries. Will serve investors well in gold, silver and copper stocks.

All the best,

Allan Barry Laboucan