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Jordan Roy-Byrne – Can We Consider This Recent Move Higher In Gold A Breakout?

Shad Marquitz
February 16, 2022

Jordan Roy-Byrne, Founder and Editor of The Daily Gold, joins us to discuss whether this recent move higher in gold above the downward sloping trendline of lower highs, would be considered a breakout at this point.   He doesn’t feel it would qualify because a true breakout is more above having pricing close above key horizontal pricing resistance levels, and a weekly and monthly close above $1900 is still the line in the sand to watch.  Jordan points out that gold is still down below the 50% retracement level in gold around $1875 and that a true break out will be a sustained move above $1900 on a closing basis.  However, Jordan is very encouraged by the move in gold versus foreign currencies, and that gold has improved versus the general US equities markets.

 

When asked if he is still expecting the corrective move down prior to the rate hikes, he now feels that is very unlikely with gold rallying and only 4 weeks left before Fed starts it’s tightening cycle.  However, if the Fed hikes to aggressively, causing a recession or market correction, then that could still be a risk in the precious metals sector as well.

 

Next we take a look at the price levels Jordan is watching in the gold mining stocks, which are also quite instructive as GDX has bounced back from  the $29 level several times in a row, with a recent double bottom there, and is heading up towards resistance at the 400 day moving average and the $34 level price resistance.  GDXJ has also bounced off support a few times and is now heading up towards overhead resistance at $47-$48 .   

 

When noting the lagging performance of the gold mining stocks relative to the underlying metals prices, Jordan outlined that the margin contraction in the producers from higher inflation and cost inputs, paired with a lower gold price than were it was trading in the summer of 2020, has kept the producers from breaking higher, and kept the moves in developers muted as their project economics have contracted.   The only path higher in the miners that Jordan sees as likely, with such a slow moving business cycle, is for the gold price to break out above $1900 and for inflation metrics to moderate, which would get margin expansion going back higher again.

Click here to visit The Daily Gold website and keep up to date on Jordan’s technical outlook.

Discussion
30 Comments
    Feb 16, 2022 16:52 PM

    Inflation can be ‘the way democracies die’: Charlie Munger

    Ben Werschkul · Yahoo Finance – Wed, February 16, 2022

    “In an exclusive interview Wednesday with Yahoo Finance Editor-in-Chief Andy Serwer, legendary investor Charlie Munger weighed in on the high stakes of soaring inflation in the United States.”

    Citing examples from the Roman Republic to Adolf Hitler to Latin America, Munger said, “Inflation is a very serious subject, you could argue it is the way democracies die.”

    He notes that it was after of years of inflation when “eventually the whole damn Roman Empire collapsed, so [the current situation] is the biggest long-range danger we have, apart from nuclear war.”

    “The recent Consumer Price Index (CPI) data from the Bureau of Labor Statistics found U.S. inflation accelerating in January at its highest rate in 40 years, with prices rising across a wide range of goods and services. The 7.5% annual gain in January — driven by high demand and lingering shortages from supply chain disruptions — was a jump from the 7.0% year-over-year increase seen in December’s number.”

    https://www.yahoo.com/finance/news/inflation-can-be-the-way-democracies-die-charlie-munger-183158672.html

    Feb 16, 2022 16:25 PM

    Acclaimed Expert says Probability High for US Market Crash & Economic Depression

    by Paul Lengemann – BullsnBears Economist – Feb 11, 2022

    Since December 2021, market crash expert Michael Markowski has been burning the midnight oil to conduct empirical (1871-2022) research on the following below. Based on the findings and his prior research of secular bull and bear markets from 1802 to 2009, he is predicting that the S&P 500’s all-time high (4818.62) reached on 1/4/22 will prove to be the high for the index’s secular bull (2009-2022) market.

    – S&P 500 PE ratios
    – S&P 500 dividend yields
    – Inflation
    – 10-year US Treasury bond yields

    https://bullsnbears.com/2022/02/11/acclaimed-expert-says-probability-high-for-us-market-crash-economic-depression/

    Feb 16, 2022 16:37 PM

    Here’s an example of people getting excited about the break above the trendline, like mentioned in today’s discussion with Jordan. Granted it’s KWN, so typically it’s a permabullish site.

    Maybe it really is a breakout in the making, but as Jordan outlined, the confirmation would be the sustained move higher for a weekly & monthly close in Gold above $1900.

    > Personally, as mentioned a number of times in the past, I’d like to see a close above the $1920-$1921 level for the confirmation that the breakout is on in force. $1920 was a key peak from last year, and $1921 has a lot of technical memory around it as the prior all-time high from 2011.

    _____________________________________________________________________________________________________

    This Leg Up For Gold And Mining Stocks Will Be One For The History Books!

    February 16 (King World News) – Graddhy out of Sweden: “This long standing ratio chart is still tagging blue trend line. The tagging since the blue breakout is the decline since August $GOLD high.”

    “Now we have a very nice bullish engulfing reversal at present.”

    “Next move up is probably one for the history books.”

    https://kingworldnews.com/this-leg-up-for-gold-and-mining-stocks-will-be-one-for-the-history-books/

    Feb 17, 2022 17:48 AM

    I’m not going to belabor it but KWN is far from being as permabullish as it seems at a glance. I’ve addressed that misconception before and concluded that people can’t get past King’s sensational delivery and maybe big-picture bullishness (which has always been warranted, btw). There has always been plenty of constructive and sober contributions during down and slow times.

    Jordan’s confidence that we’d see a spike down seemed to peak just before gold got moving to the upside. Doc’s bearish confidence seemed even greater as he talked about shorting the miners later and then having his way when the “candy store” opened. Oh yeah, he even thought Impact could be heading for 20 cents.

    I don’t subscribe one bit to the importance of 1900 gold since it has already done what I needed it to. All we really need now is for silver to confirm gold by taking back its 200 day MA and even that has become less of a concern based on the mounting evidence that we have a turn but of course it needs to happen. That currently means topping 24.43…
    https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=5&dy=0&id=p70207555567&a=1111101569

    Feb 17, 2022 17:55 AM

    I agree…………..SILVER……needs to get on the stick…… lagging for over two years….. JMO

      Feb 17, 2022 17:51 AM

      Plus one Jerry

      I fully agree with everything you’re saying! I know I speak mostly of gold but I’m also invested in silver miners and although gold is going much higher in the minors will perform I agree that silver will go more parabolic and the miners will perform gold miners because of the racial and because of history. Hope you’re doing well Jerry as Canadians up here are going through hardship in these political times unprecedented times with a peanut head of a dictator who is taking his fathers approach and taking it to another level.

        Feb 17, 2022 17:24 AM

        Glen…… thanks for the reply….. I am doing great, considering all the stupid stuff going on….and thanks for asking.
        The Canadian govt, like the US, is full of nut jobs…. They are all being exposed for what they really represent….. Demons at heart., I would say a lot more, but, this is a family show…. 🙂
        Stay safe and again thanks for the thoughts……

    Feb 17, 2022 17:08 AM

    Matthew and Jerry! Silver is going to rocket launch at some point. The charts all across the boards are lined up for juniors to start outperforming. My Cad is well positioned exactly we’re I wanted it and should start to outperform us for the next long while. Eur vs usd is looking beautiful.

    I personally don’t need any more confirmation and I’m 100% certain we are going much higher in the now as I spoke before few months ago regarding feb/march/April and that gold will reach all time high faster then many think 🤔

    Feb 17, 2022 17:09 AM

    Glenfidish
    Feb 15, 2022 15:00 AM
    It’s sure does Ex!

    Let’s see if we can now build a rounding bottom on that 4 hour chart and go tag $1910/$1920 and secure that higher intermediate weekly high that’s had us for a long period.

    $1910/$1920 first obstacle
    $1960 ish next
    $2000 plus

    All in due time..

    On track!

    Glen

    Feb 17, 2022 17:31 AM

    Let’s look at a monthly chart and remain focused on the overall picture! The quarterly looks even better 🙂 the longer the base, the higher into space

    Feb 17, 2022 17:57 AM

    Glen………… I would have to agree……. I continue to look for all three…… gold, silver, and miners…. to move higher ……. inflation is here….. and has been here for a LONGGGGG time……..

    Feb 17, 2022 17:04 AM

    Paper gold looks good but rest is wishy washy. Inflation still is going up so oil probably going down because Biden said they are going to get gasoline prices down. Similar to Trump saying look how good the Stock Market is doing. Intervention.
    In the old days before computer run exchanges, possible “War” would send oil soaring (particularly if one participant had a lot of oil) as well as gold and prices at pump would soar and shortages would occur because of Strategic concerns. Follow the money. The War thing will end up about oil.

    Feb 17, 2022 17:46 AM

    I’m of the opinion that the wishy-washy you speak about is nothing more than All Time Low sentiment. The more every newsletter writer, investor subscription and common investor keeps mentioning this the more I personally feel very good in the direction we are going.

    As far as oil, oil has stopped or is about to top and what is happening now is nothing more than rotation from equities and oil into minors in a stealth lake fashion. The volume in the minors lately has been very good extremely well in my opinion. It’s just a matter of timing and cycles anyone can blow up a monthly or quarterly chart and see where one must be positioned I’m basically almost all in on miners and in due time 2 to 3 years from now we will reflect back and see that this was nothing more than a buying opportunity of a lifetime. Golden silver are we pricing themselves as I speak and it’s just a matter of time before psychology reverses and the street will be talking about how the minors is the best place to be but that won’t come until the minors are priced much higher.

    Oil will be going down now because of Biden or any other president or any war or anything else, oil will be going down because it’s already priced inflation and the chart tells you that it’s time for a break and for the minors to outperform and start taking over. The minors will basically I’ll perform everything very soon coming to a theatre near you.

    Feb 17, 2022 17:02 AM

    Cory’s reaction at 8:45 was hilarious. Also, Jordan has changed some of his views at the 9:30 mark…..maybe 1800 is the new floor? We get a move back down after Russia dies down, Fed Hikes, and we stay at 1800 give/take, and miners hold-up, then it’s go time….the idea of needing to go to 1700 and then back up after maybe doesn’t need to happen.

    Feb 17, 2022 17:05 AM

    Glen:
    I can see the direction. I just say fundamentals are such that the technicals being driven by intervention. Same end result…I just think real world conditions send a different message.

    Feb 17, 2022 17:39 AM

    1st time back in CDE since Dec ‘19 @ $4.50

      Feb 17, 2022 17:33 PM

      Yep me too Marty ay $4.51.

    Feb 17, 2022 17:01 AM

    Man is Coeur (CDE) getting hit hard today down 17% on an earnings report that missed the estimates. I picked up another tranche on this market tantrum. While sure they missed the projected EPS estimates, did the company really get 17% less valuable today? Not really. All their assets are still in the ground, with a pipeline of producing mines and development projects for growth for the future (Silvertip will be coming back online next year), so I’m fine adding a bit down at these levels, and will add more down at Doc’s target of $4 as well.

      Feb 17, 2022 17:02 AM

      Ex, yes true for cde, remarkable, but same with past exhaults such as HL, IPT and many others in the doldrums irrespective of metals performance. Enthusiasm not matched by performance. I’m standing with a foot outside the exit with my third position in paticular aem and ngd, as this thing has bested my expectation of Nov highs.
      Let’s see how things stand with a coming hiccup. Lots of pickings to jump in on. No urgency judging by this last run up

        Feb 17, 2022 17:48 AM

        You’re hilarious spanky, er… jonsyl. Silver is lagging gold which is typical at major lows and the silver miners are typically more likely to suffer than the gold miners when the general stock market is under pressure as it is today. Even PAAS is getting smoked by the senior golds today. None of it means anything and you should know that by now. Silver is not the safe haven that gold is and silver miners are riskier than gold miners, especially pertaining to volatility risk.

          Feb 17, 2022 17:03 AM

          Then why have you perpetually promoted silver, ipt, hl with continuous babble of comparative charting, pitchforks etc. for as long as I can remember in the past year. What you say with gold as safe haven with inflation, wars etc is not a revelation. Nor is the fact that gold was given the beneit of doubt in the past month . You were the doubting Thomas with your illustrative technical guidance. Eventually something you say may stick and you clamour for recognition.

          Matthew
          Feb 01, 2022 01:01 PM
          I won’t be surprised if gold dips back into the 1780s tomorrow.
          https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=1&mn=0&dy=0&id=p71417340419&a=1104018722

            Feb 17, 2022 17:02 PM

            Your foolishness knows no bounds. I was not at all doubting anything. Gold did dip back into the 1780s just like I said it would and before that, I said more precisely that it would dip to 1780 and it did that too. Those were purely short term calls based on short term charts and not in the least signs that I doubted gold. You need to quit what you’re smoking if you still haven’t learned that fluctuations are a permanent part of all asset classes no matter how bullish or how bearish they might be. They have never and will never go straight up or straight down without having countertrend moves.

            FYI, I still like IPT and HL as much as ever. Both will smoke the likes of Barrick and Newmont when it’s all said and done and I’m confident enough about that that I never care one bit when they lag on days like today. Do you remember the sh*t I took from Birdman for all of 2015 while I increased my IPT position by 6.7 fold into all major weakness? He squawked constantly about how wrong I was because he didn’t understand the plan (like so many others in perpetuity). Then, in the first 6-7 months of 2016, IPT went up about 1,100 percent while my equally large positions in AXU and USA went up by very similar amounts. Sentiment was in the toilet and a lot of people actually thought Birdman was just swell and that Doc had their back. Neither was close to the case yet history just keeps on rhyming. Some people want their own fears and biases confirmed (their egos) more than they want to attempt to learn something and change their losing patterns. It’s never “different this time” yet here we are yet again. Like most people, you’re mentally suited to making 5% a year than chasing 500% or 1,000% opportunities because your take on things never gives you the confidence that you need.
            What you see as clamoring for recognition is really just me making sure that people like you know what the facts are after you after you repeatedly latch onto completely wrong forecasts made by great pretenders.
            Silver will be breaking out very soon.
            https://stockcharts.com/h-sc/ui?s=SLV&p=D&yr=1&mn=3&dy=0&id=p36476223776&a=649141163

            Feb 17, 2022 17:21 PM

            Oh my Matthew, the look of hl and ipt among others, argonaut, discovery etc. getting better and better, provided you don’t own it by buying it down for months. Certainly didn’t miss anything with your hype on these for past several months and then I hope it goes up 1100 percent, perhaps infinity.

        Feb 17, 2022 17:14 PM

        Jonsyl – I’m less concerned with HL, or IPT (and have solid positions in both) and not really that overly concerned with CDE (as I mentioned picking up another tranche today into the market tantrum on the earnings miss).

        What has hampered the producers is rising input costs from inflation in raw materials, energy, and wages, paired with the underlying metals prices having been weak for the last year or so, which compressed their margins.

        Now that prices are moving higher again in the metals, those margins will start expanding again. In addition, the general markets have been underperforming the precious metals sector lately, so I believe that may raise a few eyebrows with generalist investors and get more people looking at that PM miners. Overall, even with the compressed margins of late, the companies are still making good money at current prices, and would do so even at lower prices.

          Feb 17, 2022 17:43 PM

          Ex, we’re in violent agreement on your perspective, gold will not collapse with the fundamental backdrop. It’s actually never been as positive for some time. It’s a question of timing your purchase of producers rather than averaging down, then holding dead money assets and the hope of recovery with every pop up of the last year..
          Considering this gold pop up of the past couple weeks or so, the reaction from producers with few exemptions remains muted. Like I posted happy to hold what I bought into a while back with an eye on the exit. Actually hoping for a pullback to pick up some of these washouts.

            Feb 17, 2022 17:30 PM

            Yeah, fair enough on holding and waiting for the signal of a larger breakout. More or less that is what I’m doing as well, but when I see fishing line selloffs in companies that will eventually recover (like Coeur’s 17% swoon today), then I don’t mind averaging down in my trades with another tranche.

            I’ve done a little hedging in some PM positions over the last few weeks trimming a few that rallied, rebalancing a few that sold off harder than others that I expect to recover on the next big sector-wide rally.

            Also, I’ve been adding a bit more to my now 7 Uranium stocks (added Uranium Royalty Corp to the basket), taking them up to 80% positions the last few days.

    Feb 17, 2022 17:04 AM

    Got to go to my quilting club.

      Feb 17, 2022 17:16 PM

      That seems like a safe activity all things considered…. (unless it was quilting the straightjackets we discussed yesterday) 🙂

    Feb 17, 2022 17:01 PM

    out of all calls from previous pair trade where I sold tech side, somewhat prematurely.. Holding stocks for now.

    Feb 17, 2022 17:20 PM

    My account showed about 50% of stocks with no price activity all day long. Examples of no activity were: Emerita, Volcanic, Blackrock and Millennial. Obviously massive dysfunction. I will check back after “after hours” and see if they have any improvement …then again after they run EOD. Nothing functions properly anymore. At least I can look forward to Viagra some day.
    ( Already complained about the account errors if that is what you were thinking).