黄金7,000美元、白银200美元：David Hunter 再次加码

Yeah. Hi, Guy. Great to see you.

We briefly chatted before hitting the record button. We both agreed there’s a lot to discuss, and a lot of things that could potentially change your thesis. I’m really curious. Before we dive into some of the details, I want to set the scene: we’re recording this on Wednesday, October 28th, just a few hours before the Fed announcement. We don’t know what Kevin Warsh is going to say during the press conference, so I want to preface this. David, is there anything the Fed could do or Kevin Warsh could say that would change your thesis? Let’s start there. What’s your thesis right now, and could anything change it?

I don’t think the Fed is going to do anything. There’s probably nothing he can do short of saying, “Inflation’s running away. We’re going to get a lot tighter in coming months.” That would probably be the only thing that would surprise the market in such a way that it could really turn things over, and that’s obviously not going to happen.

I think we’re going to see steady as she goes. The Fed has a history of not wanting to make a decision right on the eve of an election, so it’s been pretty well telegraphed that that’s likely. Now, you do have some on the FOMC who might want to say, “We’ve got to get ahead of inflation. It doesn’t matter if there’s an election. Let’s go.” But I think the consensus is going to be that we’ll certainly be considering hiking in December, but we’re not going to do it this close to the election.

That’s where the traders are, and where the market is pricing things in right now. I think it’d be highly unlikely that Warsh would do anything different, with both the market expecting no change and the election so close. Again, if he surprises, you can certainly get a short-term reaction. I’ve been consistent over many years in saying that one Fed meeting move isn’t going to turn a market. It may cause a sell-off for a few days or a rally for a few days, but generally those are short-term events.

The bond market is what ultimately determines interest rates. Obviously, the Fed can change or alter things if they tighten or ease, but I don’t pay a lot of attention to meeting-to-meeting stuff.

Fair enough. I think the market is in agreement here. FedWatch expectations show 90% odds of no hike, so that 10% is still looming over us. But I think that’s mostly priced in, as you said.

1. Bonds Lead the Market

Maybe we’ll talk about the market real quick. You said it is priced in: the S&P 500 is at roughly 7,700 points. I’m curious how much is priced in here, because the narrative at the last meeting was that there could be two to three hikes during the next few meetings. We’re still at the same level we were before, though. I’m trying to figure out what’s actually priced in.

I’d argue it’s just what I said. The bond market obviously got CPI last month and, I guess, early this month, and reacted to it. It went right back and retested the highs—not quite to the highs back in the 5.35 level. I think it got up to 5.31 or 5.32, then reversed that day and went down below 5.20. Ever since then, it’s been moving down. It’s around 5% now, moving below five or just around five.

I think that’s what the stock market is paying attention to. It appears that we’ve at least temporarily made a top in rates, and I think it’s more than temporary. I think that’s a major top in rates, or a major bottom in the bond market, such that I think the next couple of years are going to be a very big bull market for bonds.

I’m not saying everybody agrees with me on that, but I think at least for the time being it’s the bond market that has cheered the stock market more than any worries about whether the Fed is going to hike one more time, two times, or three times. They’ll warm up to that game again as we approach December. Depending on what comments Fed members make along the way, they’ll make that judgment. But if the bond market continues to move up and rates move down, with the 10-year moving down, I think the Fed isn’t going to be the focus.

Absolutely. I’m trying to understand, though, because you just mentioned it: the 10-year went from 5.3 down to 5 flat this morning. Where’s that renewed confidence coming from, quite honestly? Was it just overhype, like we always see in exaggeration to the top? I’m curious where that renewed confidence all of a sudden came from.

Look where we came from. We came from a 4%, maybe sub-4%, 10-year. It moved back into the mid-fours, then all of a sudden broke out above 4.60, 4.70, and ran to 5.35, 5.36. That priced in a lot of negative sentiment and a lot of worries about inflation.

I think what you’re getting now—and people don’t realize this—is that they think everything is based on the news. An awful lot of market commentary is based on the tape, based on the performance of the bond market. With that move in bonds, people’s rationale follows the move. Rates drop and it looks like they’ve rolled over, so now you hear the rationale that maybe inflation’s peaking, maybe inflation isn’t going higher.

We had a lot of sentiment in there, a lot of bearish sentiment about the bond market and concern about interest rates. As the tape moved up from 4.50 to 5.35, the fact that it’s rolled over gives them a different view. Psychology plays such a big role in commentary out there, and people take the commentary as if there’s some kind of science behind it. It’s more emotion than science oftentimes.

I think you’re right on that. There’s a lot of emotion in the markets, and there never should be. I can see it in myself; I’m very emotional. I shouldn’t be, but it’s just human nature, right?

Yeah.

You can’t really change that. Let’s dissect inflation a little bit, because I think that’s a really hot topic. I was just looking at the oil price again this morning. Of course, it’s higher, but it’s not as high as it was before. People always attribute higher oil prices to higher inflation. I’m not sure that’s really the line we should go by, but what’s your take on inflation right now?

You already hinted that it might be going lower or at least remaining flat. We’re getting PCE numbers tomorrow, after the Fed meeting. What’s your take on inflation right now? What’s influencing it?

As I said, the rationale tends to follow the tape in terms of the consensus out there. I think a narrative that’s starting to build is the idea that a lot of what’s in the inflation number is temporary. It’s not things that will build on themselves and go higher.

Oil, obviously, can come down if something happens in Iran or if oil continues to flow through the Strait. Other prices that have come up here—some of them are silly ones, like investor fees—are one-time things, and then they move the other way.

So I think the rationale, because the tape is positive, has moved more toward this optimistic view that, “Hey, maybe inflation is topping out.” I tend to believe we are going to see oil topping out. I could be wrong, but I think that’s what we’re looking at.

When I look at the charts and the momentum people are following, there are signs that it’s overbought and has reached a level where it could turn. People forget where it came from. It was at 120 early in the war, or conflict, and then went back up to 106 or 107 a couple of weeks ago. This week it went up to 103 or whatever it was. You’re getting lower highs, and I think it’ll roll over from there.

I wouldn’t be surprised if we see some change after the election. The election is holding off a lot of things, whether it’s the US and Israel going back into Iran or Iran realizing it no longer has the leverage of the election. I don’t think this status quo will continue. It’s possible we’ll see this thing wind down one way or the other, whether it winds down first or Iran agrees to some things. We’ll see, but I think the more likely story is that oil goes back into the 60s, not to the 130s, 140s, or 150s that I keep hearing.

I realize there’s more to it than crude oil. Inventories have been drawn down, so there are some issues, and certainly there are issues with diesel and some of the products. But I think we’re at the point where the second derivative is important: the rate of change of the rate of change might start rolling over, and that’s sometimes where the market goes.

Yeah. I’m curious because the Strait of Hormuz seems to be open, based on some of the flow numbers showing how many barrels are actually coming through, and I don’t think that’s fully priced in yet. I’m personally a bit worried about what happens after the US midterms, and that’s a big topic we need to talk about. Right now, the polling market says there’s a 63% chance of a Democratic sweep in the US.

David, I’m curious if you’ve modeled forecasts for what happens in that scenario. What is priced in? What is the market expecting? Like I mentioned in my intro, Brazil saw a surprise victory by Lula here, and the market sold off brutally in the last couple of days. I think the number I have in my head is 23% or 24%. Do you expect a similar reaction in the US on Wednesday, once we have some concrete election results?

Yeah. First, I don’t hear a lot of people talking about this, but Kalshi and the election markets can be manipulated big time. Look at how much money is being spent on political ads this cycle—more than ever by far. There’s a lot of money out there, and I think some of it is being spent, particularly on the Democrat side, to skew those markets and make it look like the betting market, which people seem to think is more accurate than polls, is saying the Democrats are going to win.

I’d be careful about taking that as a legitimate market. It’s not a big market, and it can be skewed. I think there’s enough at stake that some people, certainly some of the people at the top of these political organizations, are willing to spend pretty good amounts of money to skew those things. So I don’t take them too seriously.

We always know that polls, and particularly a lot of the mainstream pollsters, skew to the Democrat side. What I’m hearing this time around more than ever is that people on the Republican side aren’t taking the calls or answering the texts. I think you’re more likely than not to see a typical two- or three-point move in the direction of the Republicans when the election actually happens.

A lot of these states—Ohio, Texas, Michigan, Alaska, and Maine—are toss-ups at this point. If the Republicans get their two-, three-, or four-point bounce, we see a Republican majority for sure, maybe a pretty good one. If they only get a couple-point bounce, I think it swings a couple of those states, and you still come out with a slight Republican majority.

The House is more likely than not going to go Democrat. There’s a chance it doesn’t, but as long as we hold—we meaning Trump’s Republican Party—one of the two houses, meaning the Senate, I think the dire things that could happen won’t happen. I’ve been out there on other podcasts saying that if the Democrats win both the House and the Senate, they’ve already told us what they plan to do: forget about the filibuster, pack the court, and do away with the Electoral College. That’s lights out for this country. There are big stakes here.

My forecast is still as bullish as ever. I’m not willing to bet that we’re going to see all that happen all at once. I think that’s the plan if they do. Like I said, I think the Senate probably stays Republican, so that’s more likely. If it does go Democrat and they win the House, I still think you’ve got several months before the market starts facing the reality that things have changed and are changing for the negative in a big way. The stakes are large, so there’s plenty of uncertainty until next Tuesday or Wednesday anyway.

Yeah, I was having a conversation with some friends here yesterday in New Orleans. We went for coffee, and we all agreed that it was really difficult to find a platform the Democrats are running on. I don’t want to get political at all, but I feel like this is only “anti-Trump” versus Trump. There’s not really anything else. That’s me as an outsider, sitting in Germany trying to watch the news and headlines without diving too deep into politics. I’m curious: are these really the platforms? Is it really just Trump versus anti-Trump? Has it condensed to that?

Yeah, it’s—

—that it’s condensed to?

The Democrats have had an anti-Trump agenda for a long time, going back to 2015 and 2016. I see it in New Hampshire. Sununu’s in a tight race with House Member Pappas, and a lot of the ads in his and the other congressional races try to portray him as being in bed with Trump. Even Sununu has tried to say, “Hey, I’ve never met the man,” because he feels that could be a negative in this state. In a lot of states that’s not a negative, but in a purple state it can be. That’s all they’re betting on.

If you really look at Democrat history and politics, they don’t fix inflation. Inflation under Biden was 9%. Go back through the years and look at Democrat-controlled cities. They’re disasters economically, in terms of inflation, overspending, and being basically bankrupt in many cases.

It’s silly, but people act emotionally and in the short term. They look and say, “Well, Trump went into Iran and drove oil prices up, and it’s making my cost of living go up. I’m having a hard time, so I’m going to vote against the Republican.” I wish people would be a little more rational instead of so emotional. It’s pretty much a foregone conclusion that Republicans are much better on the economy than Democrats, almost always. There are things you may not like about what this administration has done, but you really have to understand the longer-term consequences of reacting to a short-term event.

I’m in New Orleans right now, as a personal note. I’ve noticed I feel much safer here than I did last year, for example. It’s really strange; that’s just a gut feeling. There’s no empirical evidence from me whatsoever, since I haven’t looked up any stats. I just feel a little safer. It seems better on the streets, but that might just be me.

And that’s the other thing: they want to open the border again. They’ve been very vocal about that. They may run away from it when they get in a debate, but most of those Democrats running are saying they want open borders. They want to defund the police and open the prisons.

For the first time, we have a law-and-order president who’s really gone and done things. Even Republican presidents in the past have talked the game but haven’t done it. This one put the National Guard in DC to say, “We’re going to clean it up.” It’s silly that we have a nation’s capital where people are afraid to go out to dinner.

So I wish people would pay attention to the platforms. People mean what they say, not necessarily in a debate, but they mean what they’ve been saying for the last few years.

Absolutely. David, staying on the political side real quick, in Israel there’s an election as well. There’s no clear winner yet, and I’m trying to get to the geopolitical discussion. We have midterms in the U.S. on Tuesday, and we just had elections in Israel with no clear winner. What can we learn from that, and what can we interpret from it as investors in the market right now?

We’re seeing it around the world. I’m not sure exactly how to interpret it. I look at fundamentals, earnings, charts, and the uncertainty of the election is hanging over us. It won’t be clear for a few days yet, but everything else points to a bull market, so I’m really focused on that. I can’t predict the outcome; I can only look at what the polls are showing and what history shows about those polls.

Over in Israel, Netanyahu at least has the lead, and I think that’s positive for what I think comes after the election, here and there, in terms of going into Iran and finishing the job. I don’t know. I’ve heard different things. They have the same issue we have here: the mainstream wants to push against Netanyahu just like they push against Trump, so you don’t get a clear, unbiased indication.

What I’ve seen is that Netanyahu’s got the lead. I’ve seen some say he’s got as many as 60, and he needs 61. The mainstream media over there, I think, is pointing more toward the low 50s, but still a slight lead. We’ll see. I’m not sure I understand how Israel’s elections work anyway. They try to build a coalition, and I don’t know what happens if they can’t.

I’m curious, because I heard that once the midterms are over in the U.S., the conflict in the Middle East might restart. That’s why I was trying to connect all the dots and get a full, holistic picture of what we can expect in the markets over the next 10 days, whether there’ll be fireworks in the Middle East again. I don’t mean that in a funny way at all. I’m quite serious. I don’t want to see conflict personally. I’m happy for a TACO, again, personally, because I hate conflict. It doesn’t help anybody.

Frankly, Trump hates conflict. He’s said that about Ukraine and Russia many times: “You guys are killing each other, millions of people are dying. What are you accomplishing?” It’s not that he wants it, but I think they may decide that we can’t make a deal with people who aren’t trustworthy. We’ve got to finish the job, and finishing the job means we’ve got to push the regime out one way or the other. I don’t think we’re going to see big troops on the ground. You may have special forces doing things, but I do think you could see Israel brought back into it.

I never really understood exactly why Trump stopped them from going forward, but I think he has finally realized these guys only understand one thing. They’re going to do whatever they have to do to survive, so you have to get them out or you’re never going to end this thing. I don’t look forward to that either, but I think they’re farther along. I think the blockade has worked, the sanctions are working, and what Bessent is doing is working. They’ve started tracing money to points where I think it’s really shutting off the regime.

Hmm.

I don’t think it would be a long, drawn-out thing. I hear people talking about this being like Iraq and Afghanistan, and I completely disagree. I think this one could be ugly for a month or two, but I think it’ll probably be over sooner than that. That’s my guess.

I think that’s all we can hope for, right? A quick and swift end to it, hopefully. The reason I’m bringing up all these topics is that we need to talk about the precious metals as well. They’re directly affected by everything we’ve just discussed, whether it’s Fed decisions, elections, inflation expectations, or the bond market. We’ve covered a lot of ground already, David. I’m curious about your opinion on the precious metals. Gold and silver look to me like they haven’t bottomed yet, but they’re playing with the line and holding steady right now. What’s your take on the precious metals?

They certainly went further than I expected, particularly the miners. This last sell-off in the last week, or last 10 days, has gone further than I expected. I still see it as: we came down, and in July we made a low. You have an awful lot of people out there calling for 50 and below. It can happen in silver, and in gold they’re talking about 3,500. I don’t see it. My work doesn’t suggest that’s going to happen.

We’re very oversold now. The consolidation has wiped out the bullish sentiment. There are a few of us out there who are still bullish, but a lot of people are pretty negative and disgusted with the metals, and that’s what you want to see at a bottom. When it dropped below the 55, 56 level of July and went down to 53, everybody was jumping on the momentum bandwagon, saying, “See, it’s going to 50. See, it’s going to 40.” It may go to 50 or 48, but I think it’s just as likely, or more likely, that we had a retest.

As you know, retests sometimes have to drop below the previous low, scare people, run the stops, and then reverse. That’s what we’ve seen so far. I think there’s a decent chance we saw the lows this past week and are starting the next leg up. It’s very early, so I wouldn’t be a hero and say that for sure. But I think there’s a much better-than-even chance that we saw the lows, and my forecast for silver is 200 and my forecast for gold is 7,000. I think we could see those kinds of moves in the next three to six months.

It sounds crazy if it’s three months. But we saw what we saw last November, December, and January, which was three months or less—really less—where it went from the 40s to 122. I think you can have another higher high, another steep rally that may be even steeper than the last one. Right now, I can tell from my own feed there are a lot of disbelievers in that. Those who are believing and have followed me and trusted my view are starting to doubt it, even beginning to question whether it can really happen.

That’s what consolidations are about. People really have to pay attention to what happened last December and January, how dramatic that move was, and how an awful lot of the people in silver didn’t get into it until January. They caught the last bit of it and then have been hammered for nine months. That does a real number on the psyche. That’s what bear markets are about: shaking out the weak hands, shaking out the hands that aren’t so weak, and then moving forward. I think we’ve done that now.

Do we need to see any other asset class, and I’m thinking in particular of the U.S. dollar, do poorly for gold and silver to rise again?

It’s certainly part of my scenario that a big part of the run will be a drop in the dollar. Historically, if you look at gold or silver priced in other currencies, or priced in the dollar, it’s that weak currency where the price moves happen. It’s really an inverse relationship with the currency. If you’re pricing in a local currency, whether it’s the dollar or something else, weakness in that currency is a big part of the move.

So I would say yes, we should see that. I still have a dollar forecast of 82, 83, somewhere between 82 and 84. That’s a big drop from where we are now. The dollar’s spent a year or more going in a countertrend move. It dropped from 115 to 95 and change, then rallied from 95 and change back up to 103, 104, and is still trying to find a reason to go down. I think post-election that could be something we see.

And always—

Obviously, the dollar moves with rates. As rates move down, that should help weaken the dollar, particularly if our rates are moving down faster than some of the other currencies.

David, last question, because we’re out of time here. Is there anything that could derail your thesis, or maybe even push it back three to six months for gold and silver?

But anything that could derail it? Anything that could delay it?

As I say, anything’s possible in markets. These are forecasts, and forecasts can be wrong. Certainly, people who know my history know that my forecasts have been stretched out and stretched out. I’ve raised prices. A lot of the targets I had early on have been met, but I’ve constantly been raising targets because there was still so much room to run. I had many indicators saying there was plenty of room to run, and that’s still my view right now.

We didn’t talk much about my equities targets, but I think we’re looking at 10,000 on the S&P—not probably by the end of the year, though it could happen, but certainly in the next few months. S&P 10,000, Dow 70,000, Nasdaq 36,000, and Russell 4,000. I’m still very convicted, with high conviction on all of those targets. I still believe the fundamentals are very strong, and more importantly, sentiment is skeptical now. There’s a huge wall of worry that’s built up.

Even with the market only 1% or 2% off the highs—the S&P only 1% or 2% off its all-time highs—you’ve got people looking down, not up. People are really nervous. They might begrudgingly throw out an 8,000 target, which is only a few hundred points away, but then quickly say, “I’m not even sure we’ll get there before it rolls over.” I think there’s plenty of skepticism out there. Earnings power is strong. Earnings have been remarkable this year, and I think that will continue next year. Obviously, AI has a lot to do with it.

The biggest reason I ignore the uncertainty around the election or Iran is that you’re starting to see the laggards, like the banks, financials, and materials, picking up. They made a bottom a couple of weeks ago, and they’re starting to turn up. Meanwhile, AI has consolidated, but it has turned up. I think we went through our consolidation. It was a high-level consolidation: the Nasdaq corrected maybe 6%, and the S&P 2.5% or 3%. That’s remarkable given all the uncertainty out there. When a market has all kinds of reasons to sell off and doesn’t, I take that as a very bullish sign.

Absolutely. You’re right. The consolidation—even gold above 4,000—I’m happy with where we’re at. We’ve been holding the technical levels. We’ve been testing that line quite a few times, and it’s been holding steady.

And that’s against a lot of people screaming that it’s going down, that it’s going to crash. For it to hold levels like that, to me, is a very good sign. You just have to—

Absolutely.

Unfortunately, markets, as you said at the outset, try your patience. You just have to be patient because some of these things aren’t on a clock. They’ll move when they’re ready.

Absolutely. You’re absolutely correct there. David, thank you so much for your time, as always. A huge pleasure to chat with you.

Other than that, I’m out enjoying life.

As one should. Go touch some grass, I think, is always very helpful. Fantastic, David. As always, I really appreciate you coming on. Thank you so much for taking the time. I’m looking forward to catching up again, maybe early next year, to see where we stand and what the direction for 2027 might be. Thank you so much again.

Sure.