Jordan Roy-Byrne – Fundamental Macroeconomics Will Drive The Gold Market More So Than Technical Trading
Jordan Roy-Byrne, Founder and Editor of The Daily Gold, joins us look at the key technical and fundamental data points he’s following for gold and the gold mining stocks. We start off with a technical discussion around the widely discussed $1675 support level in gold, and why Jordan feels it is significant, but not nearly as much as the break we already saw in the upward slowing trendline coming out of the lows during the spring of 2021 up through the lows in May of this year, that now has a downside projection of just over $1600. We also discussed the concept a few different technicians have submitted that we may have seen a double-top pattern in gold with the two highs above $2000 in August of 2020 and then again in March of 2022. Jordan feels that this double top was indicative of most market participants posturing that the Fed will keep hiking for longer and that the recession will be more mild, but he feels the Jerome Powell pivot will likely be coming sooner than many expect and that we will not see a “soft landing” and the recession will be longer and deeper than many are prepare for.
It is for these reasons that Jordan points out that charting technicals are context, but they are not a catalyst, and rather the actual drivers of the gold price will not be a particular pattern or support level coming into play, but much more so the macro policies of the monetary and fiscal policies playing out, and the health and readings of the economy. We do go on to get his technical outlook for the gold mining stocks, and some support levels in GDX and GDXJ, and he feels they are so oversold they could have a relief rally, but ultimately the gold miners need better margins and that will come by seeing a higher gold price in response to the Fed policy pivot. We wrap up with him dispelling the notion that a pivot back to cutting would simply be good for all markets, as it will be in the context of a worsening recession and so while their may be an initial bounce in general equities, longer term the precious metals will diverge much higher in real terms versus the stock markets or the rest of the commodities.