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.
If not for Joe ‘the tell’
who would ring the bell?
Good point BDC. Yeah, someone rung his bell alright. 🙂
Funny, my portfolio, 99% junior miners, was up today
Yes, I was essentially flat on the day for Wednesday, but earlier in the day my portfolio was up.
It is interesting to note that, once again (for the 4th time in the last 2 weeks), Joe calls for “Sell, Sell, Sell” and all 4 mining ETFs have been up and in the green all day. He may be the best contrarian indicator out there. Haha! 🙂
Dollar Index : Summer 2022 : Hunting the Gap : Downside first?
https://saturationtiming.blogspot.com/2022/07/dollar-index-summer-2022.html
Dollar rule too, shall pass.
After such a big run higher in the US Dollar, it wouldn’t surprise me to see it come down and tag that 50% retracement you outlined down in the 105.30 area, before maybe seeing one more blow off top.
That is a logical confluence area,
but if it holds at 38.2%,
more to come.
Well that’s rather presumptive of you Joe.
Actually I did trim back 5 positions yesterday in the strength, after we’ve seen a rally in many of the mid-tier PMs and other resource stocks off their lows the last 2 weeks, while you’ve been yelling sell, sell, sell {in ALL CAPS almost every day}.
Again, people could make a small fortune day-trading against the daily calls you make if they were nimble traders.
After not selling the last 2 weeks to cower in cash, but conversely putting some cash to work, I’ve seen a nice run in some of the stocks purchased, so I decided yesterday to harvest a few gains to build up more dry powder, just in case we see more weakness heading into Fed rate hikes in 1 week.
Today was essentially flat on the day in my portfolio (with essentially no change -0.007%) , and more of mixed bag with a number of Silver/base metals plays up quite nicely, along with the Uranium stocks, but with the gold stocks more down overall as a group.
If we see more weakness tomorrow, then I may add a little more to some of the more beaten down names for a better cost basis, but it wouldn’t surprise me to see a bit more weakness as we head into the FOMC meeting and rate hike next Wednesday, that can be capitalized on with more buying and putting that cash to work.
I’m a little concerned about gold and wonder if silver/energy metals might be better….and stay closer to home in the tier one jurisdictions.
Yeah, the Silver stocks are more destroyed here in valuations (which is normal during corrective moves) and the silvers tend to be peppier than Gold stocks on the way back up. I think those watching from the sidelines are going to be surprised how quickly they can surge, and will be stuck chasing…. once again.
Looks like the selling is about done and a bottom is in place. Too bad Joe will be left behind.
all his words are described in one weekly gold chart…https://tos.mx/yqtaEHv
a volume confirmed ABC down w 1:1 target of 1588 or 1.272 of 1508….
I didn’t get the impression Jordan sees gold going down Below $1600 (his target is slighty above $1600 actually, but he just rounded it off to $1600 for listeners).
Larry, the targets you described at $1588 an $1508 are further below what he’s expecting, but thank you for sharing your work with us here at the KE Report, as it is appreciated.
As mentioned a number of times, I personally don’t want to see $1675 get broken, because it would denote a new “lower low” in the intermediate term, and break the pattern of “higher lows” we’ve seen since Dec 2015…which is bearish and creates even more chart damage, and confirns we’ve been in a new cyclical bear market since August of 2020. The saving grace so far has been we’ve not seen a substantial lower low put in during the cyclical bull market the last 6 years.
The bad news is that we already saw the lessor “higher lows” of $1780 and $1721 break to the downside, so another failure seems likely, and it’s alreadypretty much confirmed we’ve been in a bear market the last 2 years. Gold is already back down just under $1700 (again), so it’s pretty darn close right now to retesting $1673-$1675 again. We could see that test next week prior to the Fed’s July rate hike. The caveat being if the basis points hiked surprise the markets. That could provide one last place for gold to hold support at $1673 on a closing basis, so we’ll see next week.
If that support zone gets tested again for a 4th time, then it will likely break lower, and so first support would be the 200 week MA down around $1650 first, then the low $1600’s like Jordan & Doc have both outlined, and after those then your $1588 and $1508 levels (which personally I’d be very surprised to see hit, snd that would be bear market
That’s a big obvious legitimate target which is why it probably won’t be reached. The wash out will happen as soon as last year’s low is taken out but the buying that will be triggered will likely cause a bullish severely truncated C.
On the daily chart I see a 5 wave decline since March that could easily be completed tomorrow.
With gold now at 1692, a small 1.4% drop would take it to a new low below last year’s low 16 months ago and would also put it at a decent fork support.
https://stockcharts.com/h-sc/ui?s=%24GOLD&p=D&yr=1&mn=6&dy=0&id=p79638292641&a=1051150724
I won’t be surprised if gold finishes tomorrow higher after taking a dip lower.
ok , I buy that reasoning….but that ABCD down on weekly pattern is lurking out there…glta
I got a few things right lately. Gold has now tested my 1680 to 1655 zone and bullishly avoided making a new correction low but did make a new low for the year while silver and the miners only tested previous recent lows as expected. Gold also looks like it will close the day higher, also as expected.
The following silver chart doesn’t show today’s action yet but it will look like a trustworthy double bottom when it does…
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=1&mn=5&dy=0&id=p80574291638&a=1099384433
On the day the dollar topped one week ago, I said “stick a fork in it, it’s likely done for now.”
Since then, it has become an obvious SELL.
https://stockcharts.com/h-sc/ui?s=UUP&p=D&yr=1&mn=6&dy=11&id=p23554291428
3 fork supports just below:
https://stockcharts.com/h-sc/ui?s=UUP&p=W&yr=6&mn=9&dy=0&id=p39942559912&a=633488857&r=1658422982995&cmd=print
This one will update this evening:
https://stockcharts.com/h-sc/ui?s=%24USD&p=W&yr=5&mn=0&dy=0&id=p87910296406&a=1149751999
Thanks Joe. I took some losses this week and one was selling NG Energy to take a 57% loss. I think it went up 45% today. I wonder what price it will be at in 30 days when I can buy it back. 🤭
Lakedweller2 – That is a bummer on your trade out of NG Energy for what read as if it was for a tax loss.
It’s the only Nat Gas stock I still hold at present, and was thrilled to see GASX up 49% today. It will likely give up some of those gains tomorrow though, and that may give you a window back in it.
I was thinking about buying back in early also. It’s hard to guess when to take losses when the the take down appears irrational.
Definitely going down to tomorrow as it was a 50,000 market order in last minute that pushed up so high.
Wolf:
I just pulled up NG on the OTC Markets and it only shows 1000 shares in the last few seconds to paint a more than 10 cent pop. 50,000 sounds more like it but why would anyone want to pay that much more at the close with that many shares. Something fishy in Denmark.
Set up an opening short?
It was on the venture exchange. It would be very fishy if news was released in the morning
I guess the Venture popped about + .136 on or so on 50,000, while the OTC was +.105 or so on 1000. I guess the 1,000 was a housekeeping trade of sorts on the OTC. Strange stuff as both stand out like a sore thumb
Hey guys, well, if the volume was that low, then it was likely just a “fat finger trade” where someone accidentally placed a market order and the high ask was tagged. It will likely get reversed back down tomorrow then.
Ex might be making money these days but I’m treading water, not up or down for the last 3 months. DT
DT, to be clear my overall account value is definitely down on the year, but I made some money on the recent trades I made adding two weeks ago in resource stocks (when hardly anybody wanted to add to positions) and then trimming 5 of them back a little yesterday.
Then there are paper gains on the most of the other 2 dozen positions that I bought around the same time that I’m holding for the longer term. Those advances could just as easily get erased in the next week or so, but I’m willing to hold through any short-term weakness in them for the bigger prize when the sector turns back up this Fall. I don’t feel adding to them the last 2-3 weeks was overpaying or buying while things were pricey or overbought, so in due time I expect large returns in those.
I also needed a way to raise more funds, and for me doing short duration swing-trades is the best method for generating more dry powder. As a result I’m back to 3% funds available again, and down to 97% deployed.(down from 99.3% deployed just 2 weeks ago).
Hi Ex, thanks for the update on your trading, I’m thinking this fall maybe the time to be out, right now I am fully invested and hoping for a bit of a revival in the next six weeks, but I am being very vigilante. Cheers, as you say! DT
Yes, sounds good on that revival in the next 6 weeks DT. Bring it on!! Haha!
Mid day today, I was pondering at what price point to average down in GASX. POP! Back to break even
Just watched Michelle Makori interview Jim Rogers on Kitco. How did she get that job?
Unlike KER interviews, there is seldom any meat on the bone with hers.
Looks like news, insider trading and a hit on a well in Sinu-9. I can only hope the algos smash it down like it is a miner.
NG Energy
Watched it drift down for a long time, made up every excuse not to buy. Then when I could have bought it for a better price than most everybody, didn’t.
Broke even on it.
https://www.dailyfx.com/economic-calendar
ECB went heavy on rates: .50
(.25 expectation).
$ down.
Snap back. ECB rate hike may not be enough.
That’s interesting that the ECB went more hawkish than expected… just like Canada did. We’ll see if that is what the Fed does too at next week’s meeting.
Yes, all eyes on the Fed now. Those increases caused today’s Dollar pull back, but it bounced after retesting the 38.2% level. This and the gap area at 108 may act as a short term trading range.
Got back NG Energy 12,000 @ .68. I guess with my wash sale I will have an adjusted basis. OK …. better than paying .85 or something.
Well the initial sell off happened as anticipated. Actually surprised it’s back in mid .90’s again already….. I’m talking in Canadian.
So far, so good. I have made back most of my tax deduction and with the wash, still have that previous loss mixed into the basis. However, if things go well, the previous loss may become moot. Thanks for your projection that opening would go negative.
Forget everything I said. Typical walk back. Account the same as every other day. Somewhere close to even.
My target for HL is $2.47, Barrick $12, SSRM $11, AEM $33
Back up the truck moment if you ask me.
Candy man is stuck in traffic and won’t be ringing your doorbell anytime soon.
CJ you might get Fortuna for $2.47 but not Hecla.
The Housing Market Enters Into Recession — Here’s What To Expect Next
Lance Lambert – Wed, July 20, 2022
“The housing cycle—which began its upward climb in 2011—has officially turned over. Simply put: We’ve moved into a housing recession.”
“On Tuesday, we learned that homebuilders broke ground on 982,000 single-family homes in June. That’s down 19% since February, and down 16% from the same month in 2021. While it’s hardly a “blow out,” it’s clear builders are cutting back. Historically speaking, that’s exactly what happens when a housing cycle turns over: As existing home inventory—which builders compete against—begins to spike, homebuilders start to cut back.”
“Peak euphoria is behind us. We are giving back some of the euphoria [home] pricing that was rolling over every housing market,” says Rick Palacios Jr., head of research at John Burns Real Estate Consulting.
“Existing home inventory will continue to rise, and homebuilding will continue to slow. At least that’s the view at John Burns Real Estate Consulting, which does consulting work for both builders and investors. As it does, the ongoing housing recession (i.e. a contracting housing market) could push home prices lower in bubbly regional housing markets.”
https://www.yahoo.com/finance/news/housing-market-enters-recession-expect-081346067.html
Hi Ex, Canada is in DEEP DOO-DOO! Front Loading: Canada’s Mortgage Rates Hit Housing Market Amid Monster Rate Hikes. This is just the beginning, we haven’t had a correction since the end of 1989 and the beginning of 1990, which lasted eight years. This one will be a Whopper! Much Bigger! Many mortgages here for $500,000, $600,000,$700,000,$800,000,$900,000,$1,000,000, and to infinity. The construction industry is going to see hard times like they have never been through before. Soon it will be time to sell apples and plant trees. DT https://wolfstreet.com/2022/07/18/front-loading-canadas-mortgage-rates-housing-market-react-to-monster-rate-hikes/ 😜
Good points DT. Apparently Canada and the US learned nothing from the housing boom from 2001-2007, and the unbridled speculation and naive assumption that housing prices can only go up that eventually led to the 2008-2009 Great Financial Crisis.
History doesn’t always repeat, but it often rhymes.
Perfect double bottom for the HUI (not yet technically confirmed):
https://stockcharts.com/h-sc/ui?s=%24HUI&p=D&yr=1&mn=2&dy=0&id=p10761041079&a=1204871162
Newmont is dragging. Is there some fundamental reason for this?
I don’t think so. My guess is that the market’s biggest players want to break last year’s lows to scoop up a lot of shares easily. The December low was 15 cents lower than the previous low of 16 months ago and today’s low was 23 cents above December’s low. Considering the sentiment following a $33 plunge in 3 months, maybe today’s close call was good enough as many worn out longs probably sold assuming the break was inevitable. Either way, NEM is a sell relative to GDXJ and SILJ in my opinion.
Nearby potential forks supports:
https://stockcharts.com/h-sc/ui?s=NEM&p=D&yr=1&mn=7&dy=0&id=p80712693336&a=1205576729
Thanks. The 1:1 ABCD target is 47.47, which matches an early April 2020 gap area.
Maybe it needs to take out last year’s low versus gold as well. It would do so easily if it goes to 47.47 while gold falls less than half as much on a percentage basis.
https://stockcharts.com/h-sc/ui?s=NEM%3A%24GOLD&p=D&yr=1&mn=1&dy=22&id=p66821763186
AAPL is up 20% since bottoming at fork support 5 weeks ago and looks like it can continue higher…
https://stockcharts.com/h-sc/ui?s=AAPL&p=W&yr=6&mn=11&dy=0&id=p87522449987&a=902966061&r=1658425686093&cmd=print
Matthew,
Check out Biotech ETF XBI
Thanks, very interesting setup. It should have little trouble going through the following resistance just above if it has seen an important low (which I think it has).
https://stockcharts.com/h-sc/ui?s=XBI&p=W&yr=5&mn=0&dy=0&id=p65876604488&a=1210554448
After such a high volume 65% drop, it should at least be a worthwhile trade.
https://stockcharts.com/h-sc/ui?s=XBI&p=M&yr=18&mn=0&dy=0&id=p85428141070&a=1210560165
Like commodities in general, sugar will be in correction mode for awhile…
https://stockcharts.com/h-sc/ui?s=CANE&p=W&yr=5&mn=0&dy=0&id=p67746394044&a=590371287
Thanks to someone on another site we know that James Bianco gets it. Similar to what I’ve stated repeatedly for months, Bianco Research said the following this morning:
“With the upper end of the fed funds rate currently at 1.75% and CPI at 8.60%, the real funds rate stands at -6.85%. Throughout any hiking campaign of the past five decades, the Fed has never stopped hiking before the funds rate was above CPI. If the market expects the fed funds rate to peak between 3.50% and 3.75%, that means inflation would have to move below that level before the Fed gets what has historically been a sign to stop hiking. Even then, the real funds rate has typically been a bit above zero before a rate hike campaign ends.” They may say they are expecting 3.75% Fed funds, but the markets are not really anticipating it. Saying one thing and doing another has been so ingrained because of the greatest financial bubble that it makes all these sentiment surveys suspect.”
I will have to agree with Mr Bianco as my sentiment is suspect.
I might think this was a joke if I haven’t been following this company which is now my largest holding. If you go in big don’t worry about the price as much as does this company have a mine on it’s hands. Have a look at these goods, the drill (now 3) has been churning out huge intercepts time after time, hit after hit. If you like Silver and tin with base metal credits you need to read this news release, or any of them, they are all barn burners.
Eloro’s latest intercept,188.64 g AG eq/t over 348.6 meters. DT
https://money.tmx.com/en/quote/ELO/news/8339531619691533/Eloro_Resources_Deep_Underground_Hole_DSBU10_Intersects_18864_g_Ag_eqt_4475_g_Agt_008_g_Aut_105_Zn_076_Pb_and_014_Sn_over_34908m_in_Core_of_Feeder_Zone_in_the_Santa_Barbara_Target_Area_at_the_Iska_Iska_SilverTin_Polymetallic_Project_Potosi_Department_Bolivia
My third largest position (eloro), but I need more after this release.
I might think this was a joke if I haven’t been following this company which is now my largest holding. If you go in big don’t worry about the price as much as does this company have a mine on it’s hands. Have a look at these goods, the drill (now 3) has been churning out huge intercepts time after time, hit after hit. If you like Silver and tin with base metal credits you need to read this news release, or any of them, they are all barn burners.
Eloro’s latest intercept,188.64 g AG eq/t over 349.08 meters. DT
https://money.tmx.com/en/quote/ELO/news/8339531619691533/Eloro_Resources_Deep_Underground_Hole_DSBU10_Intersects_18864_g_Ag_eqt_4475_g_Agt_008_g_Aut_105_Zn_076_Pb_and_014_Sn_over_34908m_in_Core_of_Feeder_Zone_in_the_Santa_Barbara_Target_Area_at_the_Iska_Iska_SilverTin_Polymetallic_Project_Potosi_Department_Bolivia
Odd day IMO. Gold having a pretty good day and stocks barely positive. Gary says: https://goldseek.com/article/gold-update-close-enough
Today was better than it might seem but we do need tomorrow’s action to back it up.
It was good to get some 7/18 gaps filled today and now it looks like SILJ is building a bullish little H&S bottom. It’s already a buy in my book but that doesn’t mean the buy can’t fail.
https://stockcharts.com/h-sc/ui?s=SILJ&p=D&yr=1&mn=1&dy=22&id=p28279119788
And WHOOOOSH!!!
Down goes the price of gold!!
Rising input costs? Check.
Currency headwinds? Check.
Declining price? Check.
The only thing left for mining stocks to do is to go down.
You could have sold Monday and Tuesday, but you didn’t, did you?
Well get ready for lower prices because they are a comin’!
Wait until the earnings reports start coming out.
I know things look bleak, but there is one thing you can do to help.
SELL!!!!
SELL NOW!!!!
CASH IS KING!!!