Jordan Roy-Byrne – Gold Has Had A Breakout, But Is It A Significant Breakout?
Jordan Roy-Byrne, Founder and Editor of The Daily Gold, joins us to share his outlook on what is being dubbed as a recent breakout in gold and the gold miners, and whether it is a significant breakout. While he agrees it is worth noting that the yellow metal did close above that $1835 resistance, he sees the $1900 target on the monthly and quarterly charts as the much more important line of resistance to break out above for it to be significant. While he is open to the idea that gold could make it up to $1900, or a little above that, on the daily charts in the next few months, he believes the more significant break above that level on the monthly charts will happen next year. Jordan stressed the importance of investors looking at price action and technical analysis on multiple time frames, and look for confirmation of breakouts on the longer duration charts.
Next we reviewed that gold has lagged the moves higher in the general markets and that really we need to see a corrective move in the US equities before more investors will get interest in gold and the precious metals miners. We wrap up considering the question of if the Fed escalated their tapering to finish sooner and then ramps up their rate hike cycle earlier than projected, then could that be a scenario where gold could rise higher in tandem with rising general stock indexes?
Click here to visit Jordan’s site and keep up to date on his technical analysis on the metals.
DT – Thanks for the heads up on SCZ lifting their trading halt for tomorrow. It has been a shame that they were halted for over a month now on the news of their acquisition of Glencore’s 5 producing mines, 3 mills, 2 exploration projects, 2 power plants, and a partridge in a pear tree.
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You are right that Glencore does not F around, but keep in mind this was a friendly acquisition in non-core assets from Glencore, that will be very “core” for Santacruz Silver. This is a similar model that Glencore has followed before helping to incubate other partner companies like Trevali with several of their non-core Zinc mines. They unfortunately timed out the zinc metals prices wrong with (TV), but they are finally starting to claw their way higher and pay down debt now that the zinc market has improved substantially in 2021. Glencore has taken an interest in Falco Resources that we just released the interview of today.
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While no mining company should want to be on Glencore’s bad side, especially since they often operate as the smelter for many companies, they do have interest in helping a number of junior companies to expand, and it looks like that is the plan with Santacruz silver, and it is absolutely going to be transformative for the company. However, SCZ now has to come off halt and raise $20 million for their initial payment in this acquisition. At this point enough investors and institutions have had the time to review the deal to decide if they want in on that financing.
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It’s just a bizarre sequence of events, because under normal times, SCZ would have rallied hard with the rest of the silver stocks over the last few weeks, and off the back of a solid Q3 operations report, but they’ve been held to the side all this time. On the other hand they need to do a capital raise now, but it’s for 5 more mines and 3 more mills and a couple power plants. Haha! Wild!!
(SCZ) (SZSMF) Santacruz to Acquire Glencore’s Producing Silver Mines in Bolivia Creating a New Significant Latin American based Silver Producer
-13 Oct 2021, 07:07
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“Assets include five producing mines, two exploration projects, three milling facilities, one trading company and two power plants (thermo and hydroelectric) among the most relevant.”
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“Santacruz will pay initial upfront consideration of US$20 million (subject to customary working capital adjustments), and an additional US$90MM is payable in equal installments over four years from the closing of the Transaction, subject to certain conditions and adjustments. In addition, Glencore will also be granted a 1.5% net smelter returns royalty on the Assets.”
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https://ceo.ca/@newsfile/santacruz-to-acquire-glencores-producing-silver-mines
I’m curious to see what 5 more Silver mines, 3 mills, and the rest of the assets do for the current production profile of Santacruz Silver moving forward, and how much revenue they’ll generate with Silver in the mid $20s. I wonder what they will look like economically if a sensitivity test was given for $30 Silver, which seems like a real potential for next year.
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Based on SCZ’s current profile before this acquisition, here was their Q3 numbers:
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“Consolidated silver equivalent production for Q3 2021 was 872,913 AgEq ounces; an increase of over 9% compared to Q2 2021”
“Zimapan silver equivalent production for Q3 2021 was 867,215 AgEq ounces; an increase of over 14% compared to Q2 2021 that arose primarily as the result of a 20% increase in tonnes milled during the respective periods.”
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https://ceo.ca/@newsfile/santacruz-silver-reports-q3-2021-production-of-872913
It would be an interesting to see how and why Glencore approached Santacruz. Like you mentioned Ex, this could be a new model for mining companies. The wheel is always turning and it still can be re-invented. Maybe you could interview management at Santacruz in the future, they may not be willing to discuss too much at this stage. Still it seems like a good story to me. DT
Agreed DT. Nice to see a little synergy between the big boys and the juniors teaming up to surface more value for both companies.
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I’ve actually reached out to Santacruz Silver about 4 times now to see about getting them on the show for an update and didn’t receive a response back, but I’ll keep trying. Sometimes it takes some serious persistence to get these companies on initially.
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Tomorrow we are going to release the interview with I-80 Gold Corp, a growth-oriented gold producer, and it’s taken me months just to get it set up. I’m still working on a few dozen other companies behind the scenes, but shockingly many don’t ever write back, or get part way into scheduling and get distracted. They are likely going to get swarmed now with more offers to interview them, due to this key transaction, but I’ll keep trying to get SCZ on the show. Ever Upward!
Quite a nice pop in SCZ today up over 26%. Nice to see them get rerated up with the rest of the pack of silver miners after having been halted the last month and missing out on the move higher in the PM stocks over the last few weeks.
Dollar Week : https://tinyurl.com/kxdkus89
Borrowing a Sentiment Tool From the Yen To Use With Gold
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Tom McClellan – McClellan Financial Publications – Nov 17, 2021
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http://www.321gold.com/editorials/mcclellan/mcclellan111721.html
Gold Price Holds Near 5-Month High As Inflation Pressures Remain
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Mining.com – November 17, 2021
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“Gold prices bounced back on Wednesday, holding near their highest levels since June, as inflation worries continue to push investors toward the safe-haven metal.”
“Spot gold rose 0.8% to $1,865.18/oz by 11:30 a.m. ET, erasing its losses from the previous session. US gold futures gained 0.7%, trading at $1,867.30/oz in New York.”
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https://www.mining.com/gold-price-holds-near-5-month-high-as-inflation-pressures-remain/
We’ve had a few people post some Taylor Dart articles on here recently, where he was being tough or overly conservative on mining companies. Well, here’s a company that he actually likes (rare), and I’d agree with him about that conclusion.
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(KRR) (KRRGF) Karora Resources: Another Beat For This Organic Growth Story
– Nov. 17, 2021 – Taylor Dart – Seeking Alpha
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“Karora Resources released its Q3 results last week, reporting quarterly production of ~30,400 ounces at all-in sustaining costs of $967/oz. This translated to a 23% increase from the year-ago period, with costs tracking well below FY2021 guidance despite a stronger Australian Dollar.”
“Armed with one of the best organic growth profiles sector-wide and a team that continues to under-promise and over-deliver, Karora continues to be a top-3 junior producer.”
“Based on the favorable growth profile and continued exploration success, I would view sharp pullbacks as low-risk buying opportunities.”
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https://seekingalpha.com/article/4470259-karora-resources-another-beat-for-this-organic-growth-story
Some of the better organic growth-oriented gold production stories are Karora Resources, Argonaut Gold, I-80 Gold, Equinox Gold, Calibre/Fiore new combined entity, Mako Mining, Thor Explorations, Novo Resources, Golden Minerals, Gold Mountain Mining, Anaconda Mining, Alamos Gold, and Minera Alamos…. and yes, I own all those so I’m biased. 🙂
In addition to positioning in growth-oriented gold producers, with solid exploration and development upside, I also like having a few ugly ducklings in my portfolio that may be turn around stories and go from zeros to heroes with investors over the medium term. While they may be despised at present by most investors, I’m happy to have contrarian positions in companies like McEwen Mining, Americas Gold & Silver, Pure Gold, Superior Gold, Jaguar Mining, Aris Gold Corp, Galane Gold, Galiano Gold, and even Kinross for their potential to really turn their operations, outlook, and investor sentiment around over the next 12-18 months.
… and yes, I have positions in all of those as well and am biased in that regard.
He even owns it so that’s a strong recommendation.
Recently he recommended Fortuna(FSM) below 4.25CAD and shortly afterwards it dropped to $3.87 so I wonder if he bought that, considering the reasons for the blow up in FSM.
Craig Hemke – Gold & Silver Spike Amid Worst Inflation In 30 Years
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Liberty and Finance – Nov 11, 2021
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0:00 Intro
1:05 Inflation 6.2%
6:15 Gold & silver update
13:00 Fed chair replacement?
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https://youtu.be/lfTYX_b3ye0
Mario Innecco – Inflation Is Here To Stay
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Liberty and Finance – Nov 12, 2021
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0:00 Intro
1:00 Inflation
3:33 Fed taper
8:09 Long-term inflation
9:35 Gold & silver
13:14 Infrastructure bill
21:20 Physical gold & silver
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https://youtu.be/sn_PDAwMLLM
Michael Oliver – “On The Cusp Of A Breakout” – $8000 Gold & $200 Silver Long-term
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Liberty and Finance – Nov 15, 2021
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0:00 Intro
0:57 Gold breaking out
6:32 Stock market topping
12:14 New Fed chair?
14:39 Fed taper
16:44 Inflation
18:07 $8000 Gold & $200 Silver
22:54 Retirement accounts
25:59 Platinum
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https://youtu.be/6S8P2jbtPt0
Breakout in gold in the 4 hour chart which is what I’ve been watching. Liquidity higher here we come.
I respect Jordan but Jordan is conservative in his ways. It is my belief that he “ may” have to chase prices higher if what I truly believe is happening is Happening. The bull has a way of leaving you behind. By the time 90% of investors have confirmation above, the intermediate correction will be on its way. These things need to be seen with a magnifying glass.
Miners are in the march!
Glen
Thanks for sharing your outlook Glenfidish, and for keeping a close eye on the PM markets.
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https://giphy.com/gifs/movie-disney-JUh0yTz4h931K
Thank you ex.
I have plenty of respect for Jordan has been around forever and his approach is wisely taken as well.
I don’t manage money and I believe he does and I do enjoy his coming here and always sharing as I do with everyone.
By the way ex and everyone in here. I’m curious to know what your thoughts are with Gary savage and his 8 year cycle he is really bent on going lower into next year. Does anyone else in here follow the 8 year cycle or do you guys think it could be a shorter cycle etc.
I’m really curious to know what you all think including you ex. He believes we are way to early to have bottomed.
Anyhoo it is nice to see for a change miners going up and more upward pop would be really cementing this move.
Hi Glenfidish, I don’t really follow cycle analysis that closely personally, so not really much of an opinion on it, and I’ve heard some use 3 years, some use 7 years, and I guess he is using 8 years. It just isn’t something that personally animates my trading decisions.
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I’m pretty bullish moving into 2022 for a few different fundamental and technical reasons.
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1) I believe there is going to be a “checkmate moment” next year with the Fed when they have to speed up their tapering and start hiking interest rates, where the general markets FINALLY realize that the emperor is wearing no clothes, and the Fed has painted themselves into a corner. As many of us have repeatedly stated on here, there is no way mathematically that they can normalize rates up anywhere close to where inflation just came in at 6.2%, or 5% or 4%, much less get up above the rate of inflation. When this does dawn on the general broader market observers, I believe there will be a loss of confidence in the Fed’s ability to handle inflation, and a rotation of some funds into gold as a safe haven. We should see that realization begin next spring and summer by even the most dim of financial bobble heads in the main stream media.
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2) Most rate hiking cycles in the past have actually been a positive for Precious Metals, as we’ve seen a number of times in prior cycles, including when the Fed hiked for the first time in 8 years in December of 2015. That is what marked the bottom of the bear market in Gold, and kicked off the recent bull market we’ve been in. Even if the Fed does wait all the way until June to start hiking and even if inflation does pull back down to 4% or 3%, the effect will be the same, and the Fed will once again be “behind the curve.”
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3) If one pulls up a 5-6 year chart and looks at the pattern of Gold during the entire bull market that started in Dec 2015 at $1045.40, it has made a series of higher lows on each successive corrective move, which is longer term bullish. I’ve outlined this about a dozen times on here, and it held true again most recently where the low for 2021 was way back in March of this year at $1673 during that double bottom in the yellow metal, and that same level was even back tested at $1676 and held strong and reversed. That is bullish, and all those bears expecting gold to go down into the low $1600s and even mid $1500s were wrongo in the congo. Haha!
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Here are the higher lows and chart highlighting them:
$1045.40
$1124.30
$1167.10
$1446.20 (Nov 2019)
$1450.90 (March 2020 pandemic crash)
$1673.30 (from March 2021 double bottom)
$1675.90 (from August 2021 retest)
$1721 (recent low, remains to be seen if it holds, but looks likely at this point)
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>> Gold chart showing the pattern of higher lows in this bull market:
https://schrts.co/hSyTTBWk
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4) I believe Dave Erfle was spot on about the September 2021 monthly and quarterly close in Gold, Silver, GDX, and GDXJ being quite significant in pulling itself back from the brink of a breakdown, and it was a bear trap that caught many of those expecting lower prices on the wrong side of the trade.
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5) I am encouraged by this recent break above $1836, and the definitive weekly closes above $1850. While Jordan is correct, that a weekly, and preferably monthly close above $1900-$1910 is key for the real breakout, this action since the September monthly/quarterly close has been 6 weeks of bullish action and we are far closer to piercing that $1900 level ($30 away), than we are breaking down through $1673 to a new low (that’s $200 below where gold is at presently).
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6) I believe we’ll see that break above $1900 that stays around for a quarterly close in the first half of next year, and then I also anticipate the other resistance levels of $1921, $1962-$1966, and the all time high of $2089.20 to be eclipsed next year.
Cory mentioned today that while we have 30 year highs in inflation that we don’t have 30 year highs in gold, but I’d submit we just saw more than 30 year highs in Gold last year (in fact the highest dollar amount in gold ever for hundreds of years), because it sniffed out the coming inflation issue earlier than the generalist markets. Sure it has consolidated since August of 2020, but that is normal action after having such an epic run from the Fall of 2018 to the Summer of 2020. Now that it has washed out sentiment and cooled off the indicators, Gold will likely make it’s next big run over the next 6-12 months.
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7) I believe the $30 ceiling on Silver is going to get breached to the upside as well in the next 6-12 months.
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8) I believe this time…. the miners are going to have better outperformance on the way up than they did in 2020, where most miners didn’t really process the last legs higher in the metals prices and underwhelmed, compared to what they historically would have done. When Silver and the mining stocks really take off in the next 6-12 months, it will be a bustling bull market, and pull in more generalists.
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9) Even though it is a tired trope to say so, I do think the general markets are going to get toppy next year and after an insane run higher since 2009 to 2021 – This epic 12 year run by the general markets will not last forever, and the hiking of interest rates may be the final nail in the coffin. That would only bolster the move of more investors into the PMs as Jordan has pointed out.
Ex thanks for the long and well detailed summary.. I tell ya you go above and beyond explaining things and it’s well notes. Can’t say I disagree with anything and it all looks good.
Thanks for outlining your pivot points or resistance levels.
Also great to hear about your theory on cycles and that of many different types in forms of years.
Gracias
Thanks Glenfidish. I’m looking forward to a much better 2022, and believe we’ll make some really nice gains in the mining stocks by this time next year.
Thank you EX……I have never seen such talent for clarifying fundamentals…WOW…actually unbelievable…..
My trade in natural gas is purely technical…In order to capture the retest of that high volume top several weeks back…That is all…I have no idea if nat gas is fundamentally bullish or bearish…So there!…lmao
I appreciate that comment Larry, and feel you have an excellent grasp on the technicals as well. We are blessed to have such a well informed group of contributors here on the KE Report.
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As for Nat Gas, duly noted and we’ll see how it goes… Cheers!
Nat gas looks terrible right now but is going much higher long term (years+).
https://stockcharts.com/h-sc/ui?s=%24NATGAS&p=D&yr=1&mn=3&dy=0&id=p13471474536&a=1065248041
This is getting fun…..Boil is now 52ish my target is 86ish…Why?…A Gartley Buy pattern with Two ABC’s down from the highs and RSI divergence at this bottom plus perfect time symmetry since the 8/19/21 loe…lmao….Then nat gas is another sell following my profitable retrace…lolololol…double clown good…🤡🤡
https://tos.mx/1Hbwu5W
I will be impressed if that works out. There’s a lot to overcome but it is still above its September 2020 high after filling that September 1st, 2021 gap.
https://stockcharts.com/h-sc/ui?s=BOIL&p=D&yr=1&mn=5&dy=0&id=p89790275949&a=1065538381
me too…this idea i got is now wearing me out…the nat gas had a build of 1 billion today…not to lucky for me….i will be ok with exiting…i just thought the shorts will need a covering rally and that will pop the thing back into its high volume retest….all is not lost yet…….i cannot do anything at this price right here…trading purgatory must be like h-ll….lmao
bullish island reversal being formed on BOIL…shorts trying to get out prior to the pop up Monday on temperature news…….imho
i try to exit trades after 3 days, if not performing in my direction….but a consolidation/island reversal is keeping me in…….i am bending my rule…will it transmit wicked outcomes for me…no idea…i will just keep my stop in place….
Say it ain’t so! A beloved member here of the Kereport family ‘The Great American Shaman aka ooooooooooJerry’ has been railroaded by a blatantly predjudiced judiciary and sentenced to 41 months without organic food.
It is unclear at this time if the shaman’s signature buffalo robes come in institutional orange.
Regardless, we send Jerry all our best wishes.
thanks Blazebd…………..
I will miss you guys………lol……. 🙂
I understand Nancy will be on her way to GITMO…. along with a few others…. LOL….. 🙂
I was buying CF in the 20s and 30s but now it looks tired…
https://stockcharts.com/h-sc/ui?s=CF&p=D&yr=0&mn=11&dy=0&id=p70969134788&a=832414183
Gold will break out tomorrow with a close at 1883. Then it can go on to take out the June high near 1920.
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=0&mn=8&dy=0&id=p21516018300&a=993652669
I bet silver will see 29+ before the year is over.
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=5&dy=0&id=p55260898146&a=937970450
The Fasten Seat Belt Sign Just Lit Up
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Jesse Felder – The Felder Report (11/17/2021)
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https://thefelderreport.com/2021/11/17/the-fasten-seat-belt-sign-just-lit-up/
Thor Explorations Ltd. (THX) (THXPF) Maiden Mineral Resource Estimate and Mansa Discovery Drilling Results Declared for the Douta Gold Project, Senegal
– 17 Nov 2021, 23:01
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– Maiden Resource Estimate for Douta Project is supported by a total of 35,728 metres of drilling
– Maiden Resource of 730,000 ounces of gold grading at 1.5g/tAu
– Mineralisation at Makosa remains open along strike with further growth potential
– New mineralised discovery at the Mansa Prospect located 5km along strike from Makosa
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https://ceo.ca/@newsfile/maiden-mineral-resource-estimate-and-mansa-discovery
Here’s How Markets Might React If Biden Picks Lael Brainard as Fed Chair
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Bloomberg – Elizabeth Stanton – November 17, 2021
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“A decision by U.S. President Joe Biden to nominate Lael Brainard as Federal Reserve chair instead of Jerome Powell could provide a narrow window of opportunity for traders in rates and foreign-exchange markets — even if the shock wears off relatively quickly.”
“With the perception that Brainard might be less inclined to tighten monetary policy than the incumbent, the initial reaction in markets could see short-term interest rates pull back and a weakening of the dollar. But such moves could prove short-lived, as whichever candidate ends up in charge will ultimately be hostage to the uncertain inflation and growth landscape.”
“Brainard certainly leans more dovish,” according to Blake Gwinn, a strategist at RBC Capital Markets. But both “are drinking from the same well” of information, “and both are going to be forced to reconcile with the realized inflation data on the ground.”
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https://finance.yahoo.com/news/markets-might-react-biden-picks-164000803.html
How about Jim Grant or Nomi Prins or someone else outside the Den of Thieves. As McEnroe would say , “Certainly you can’t be serious”.
Mid-morning of 11/18: Some up some down…-$1000
S&P hits all-time high
Crow Lines are breaking : https://postimg.cc/18nSJFB0
Argh!
I think the Canadian dollar’s three week decline has ended.
https://stockcharts.com/h-sc/ui?s=%24CDW&p=D&yr=0&mn=8&dy=11&id=p98542590484&a=1065600101
A crack of this weeks gold lows back to the 1840 +/- zone, followed by a sharp recovery above recent highs is the magic sauce. Premature enthusisam needs to be punished.
as for spx, it’s demise has been proclaimed for weeks and months. Only thing now making it a possibility for some kind of pullback is Savage call for a hyperbolic meltup with gold languishing for the next year.
Such “punishment” is the norm all the way up whether enthusiasm is premature or not. A dip to 1833 would be great.
Guess What, Santacruz Silver will be trading tomorrow. I hope their negotiations went well for the company. Glencore would be a tough negotiator. LOL! DT