Jordan Roy-Byrne, Founder and Editor of The Daily Gold, joins us to review the reversal in fortunes for the precious metals sector, where it has diverged from traditional expectations and rallied this week into the headwinds of negative macroeconomic factors. This has Jordan very constructive on the PMs moving forward, and he feels the worst is definitely over for the sector and that it is unlikely for Gold to make new lows at this point.
We start of discussing rising interest rates and rising real rates and the anticipated start to the Fed rate hiking cycle, and the increase in the number of expected hikes to around 4 in 2022, all of which should be pressuring the precious metals. This brought up the topic of whether gold, silver, and the miners will need to necessarily sell down in the next few months prior to the rate hikes, and Jordan mentioned that this recent move higher may have negated that and we may just see a consolidation of this move, before the next move higher. Jordan likens this action to the period to other rate hiking regimes in the 1970s through the 1990s where we saw high energy prices, hot and sticky inflation, low consumer confidence, and slowing growth, in a backdrop of stagflation.
Next we pivot over to key levels in the metal that are important to clear to confirm upside momentum; in gold at the $1855 trendline resistance and then $1900, and in Silver at $25. We wrap up discussing shorter-term resistance levels at the 200 day moving average, that Jordan is watching in the miners using GDX, and the GDXJ as sector proxies.