Jordan Roy-Byrne – Technical Outlook On Gold, GDXJ, Silver, And Their Eventual Divergence From US Equities
Jordan Roy-Byrne, Founder and Editor of The Daily Gold, joins us to discuss his technical outlook on gold, GDXJ, silver, and their eventual divergence from US equities. We start off discussing the key support level gold has pierced below, and where support may come in. The trend has clearly been down over the last few months, and Jordan provides some key technical support levels that we need to be watching for to signal where a turn may occur.
We also discuss, when looking at silver’s recent outperformance of gold, there is still a small potential that we could be seeing the early stages of a non-confirmation bottom in gold. However, with the weakness in the PM mining stocks, like GDXJ, and the expected lower levels to come in the S&P 500 and in gold, then Jordan still believe silver will roll over and make one more move lower before bottoming after gold does.
With regards to the general equities, a key technical level remains the 40 month moving average and them staying below that level, to ultimately show they are in a secular bear market. Out of that market correction, and liquidity event, that should provide the leverage for precious metals to recover faster and begin to diverge and embark on a true secular bull market.
Click here to visit The Daily Gold website and keep up to date on Jordan’s technical outlook.
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To Calm Markets, Bank of England Will Buy Bonds on ‘Whatever Scale Is Necessary’
The New York Times – (09/28/2022)
“The purchases are designed “to restore orderly market conditions,” the central bank said, after days of turmoil that followed the government’s plan for sweeping tax cuts and higher borrowing.”
https://www.nytimes.com/2022/09/28/business/economy/bank-of-england-bonds.html
Bank Of England Emergency Action, What It Means
Kenneth Rapoza – Forbes Senior Contributor – Sep 28, 2022
Central Banks are intervening more in markets. I don’t want to repeat what market participants are telling me about the Bank of England’s (BoE) move to save pension funds from supposedly going belly up. They bought an unlimited amount of sovereign bonds to bring yields down and bond prices back up. They were supposedly afraid of a wave of insolvencies. That’s the word on the streets of London.
“The Bank of England is in a sense responsible for this because they have hopped onto this central banker hubris right now, which is to dampen demand to stop inflation,” says Vladimir Signorelli, head of Bretton Woods Research. “I believe this means they are going to flood the U.K. monetary system with liquidity. When the Bank of England buys bonds, it puts more liquidity into the economy, but when you have more (British) pounds in the economy than is necessary, then you have a pound that gets weaker and weaker. It’s money printing. That is their answer. Their answer to contraction is money printing.”
“Markets are unstable, economic situations are dire, and the reputations of lawmakers have been shredded into pieces. This is the view among traders who are looking at the U.K.’s fixed income and forex markets,” says Naeem Aslam, chief market strategist for AvaTrade in London.
https://www.forbes.com/sites/kenrapoza/2022/09/28/bank-of-england-emergency-action-what-it-means/
Well…. It appears that things are starting to break overseas….
First Europe and the Euro got smashed as they plan to bail out businesses that can’t afford the surging energy prices.
Then Japan started selling US treasuries to underpin the Yen, and stop the bleeding.
Now we have the Bank of England in crisis management mode as things gradually come unhinged.
Next stop the USA and the Fed will likewise to have to backstop things in a similar manner when the jig is finally up…
The Bank of England averts a crisis but only for a moment
Stephen Bartholomeusz – Senior business columnist – September 29, 2022
“There was an almost audible global sigh of relief on Wednesday after the Bank of England (BoE) intervened in response to what was fast developing into a foreign exchange and bond market crisis in the UK; one that was also rippling through international equity, bond and currency markets.”
“Around the world, bond yields slipped back, sharemarkets edged up and currencies stabilised after days of volatile trading in response to what has been described as a “neo-Reaganite” tax cuts and spending spree announced by new UK Prime Minister Liz Truss and her chancellor, Kwasi Kwarteng, last week.”
“The BoE’s intervention was, at face value, peculiar. Until this week, the bank – in response to a UK inflation rate nudging 10 per cent – was pursuing an aggressive tightening of its monetary policies…”
That article was probably unfair to Mr Bailey in that he was probably not asleep … it was probably intentional.
Good point Lakedweller2.
Well, today was solidly green day in the resource space and definitely in the PM stocks.
GDX up 7.18% today
GDXJ up 7.87% today
SILJ up 7.58% today
Lots of individual miners up far more than that today, so a nice change of pace.
It may have just been an oversold bounce, after traders were panic-selling out of positions on Monday and Tuesday, but still it was a nice change of pace.
It’s notable that there weren’t any “glug, glug, glug miners going down the drain” posts from our normal trolling gas-lighters today… not a surprise really, as they are always silent on the big up days.
Personally I’m glad to have added to a half dozen positions on Monday and Tuesday into the continued weakness, instead of selling near lows to run cower in cash like the all-caps megaphone guys implored all participants to do. All those positions I picked up on deep discount are already up nicely in the money at the close today.
That could all get reversed back down in the days to come, but just pointing out that most investors continue to struggle with the simple concept of “buying low,” as the mining stocks are definitely not pricey here. Conversely, I’ve been fascinated with the very negative sentiment and comments seen on a number of other chat boards and social media platforms, where those punters were capitulating on their positions on the big swoon we saw on Friday last week, and the continued weakness the first 2 days of this week.
I had mentioned on Friday my decision to hold my nose and deposit more funds into my trading account from deep savings, to be able to pounce on any further weakness we saw this week. That is precisely what happened to kick off the week, so I took action and put my money where my mouth is, buying up some silly valuations while others were over shaking in their boots. It is the same experience and feeling I had buying in late Dec 2015 and into Jan & Feb 2016, the same experience buying in October of 2018, and the same experience buying in March of 2020 during the pandemic crash. It always feels uncomfortable, it always feels lonely, and the fever pitch of negativity is usually deafening.
We discussed 2 days ago the insanely low BPGDM reading at 7, so most mining stocks have been plumbing their lows lately, and the market breadth is terrible. That is a bell ringing for those that can hear it, of course so many have already walked away from the sector at this point and aren’t even listening for the signal. A contrarian investor or value investor, would be buying setups like what we were seeing the last few trading sessions, but of course, the vast majority of investors, in any sector, will always let fear rule them, and then watch short-covering moves like we saw today from the sidelines. Rinse and repeat.
The silence is golden……………… lol…………… 🙂
🙂
Hi E$x, when a bell rings an angel gets his wings. “A Wonderful Life”. DT😉
My guess is that the bottom is in, for next few weeks. Manipulated markets to da moon—
We shall see if that dive down to $1625 in gold, as the $1673-$1675 support was pierced, just ends up being a quick flash crash and bear-trap, or if we still have the many months of downward pressure into the $1500s and $1400s that so many are calling for. We’ll need to see some follow though for the balance of the week, and possibly a last minute pop before the monthly/quarterly close this Friday.
Overall things are pretty ugly, and one day’s rally doesn’t make a market, but every turn in direction starts with a move like what we saw the last few days. The odds are it is just a little relief rally in a continuing move lower, but my only point was that this was a logical place to see things bounce, and if we are going to see a bear-trap scenario, it would look like the capitulation we just saw last week and this week, followed by a rebound that hardly anybody was calling for. We’ll see if this bounce has legs, but it was just an interesting few days in sentiment extremes, and then reversals, on a micro level.
Zowie, maybe I spoke too soon. Although, still have UVXY to offset
Some up and some down…same ol
Hurricane Ian has had it’s revenge hitting one of the fastest growing regions of Florida around Fort Myers. Florida has been experiencing a boom as many people from California have recently moved there. It picked up trees, lumber, pipes, tiles, debris, and even cars and sent them crashing into homes. Two and a half million people are without power, hundreds are feared dead. Cell phone towers are down, many people can’t reach relatives and those in need. Many businesses will go into default, another blow to an already debt-based economy.
It reminds me of The Hurricane in 1927 that came crashing down on Miami and Biscayne Bay. It seems as if the cards are falling over these days, like a set of dominoes. DT
I’m noticing more and more companies are putting out “Verify” presentations that allow them to show their drill results in 3D, and allow individuals the flexibility to pivot the images around or zoom in on certain areas of a map, etc… Many of the presenters at the conferences in Colorado incorporated these into their live presentations.
Here is a recent example of an interactive Verify slide deck from Silver Tiger (SLVR) for example:
day/GC…technically gold does now today have a swing low in place….but still the slow stoch is below the 20 % signal line…as such, no buy signal….eg for trying overnight holds imho…the 240 minute does have an intraday day confirmed buy mode…so based on this data i keep my trades to the intra-day status…that is usually recommended….
day/DXY…if the dollar finally topping and rolling over is essential for gold to rally, i just do not see that happening just yet…imho….11.800 should hold on the first attempt dowm
someone is deflating the supply side industries…prices will go up from supply shortages….that leads to price inflation even without monetary inflation…this then seems to portend hyper-inflation…… supply shortages plus monetary fiat destruction…how much worse could it get long term for dollars value…..what da h-ll do i know?…..The question is when to push in the chips , still is difficult to nail…glta
UUP has been capped at this big fork resistance for the last 3 days and is now more than 1% away from it…
https://stockcharts.com/h-sc/ui?s=UUP&p=W&yr=6&mn=0&dy=0&id=p40196561748&a=1257966523
The odds of the dollar stalling here are pretty good in my opinion.
https://stockcharts.com/h-sc/ui?s=%24USD&p=W&yr=6&mn=9&dy=0&id=t0635388181c&a=787551484&r=1664471074772&cmd=print
The low in the gold-silver miners that’s been in the works for weeks is going to prove far better than all the scared price chasers would have you believe. Unlike the lows of 2016 or 2018, this low is happening after a major top in the stock market. The last similar setup was 20 years ago but even that one was very different since it did not also come with a major top in the bond market.
SIL, SILJ and GOAU are up right now while SPY is down 2.4%, the Nasdaq is down 3.2% and SLV is down 1%. Those who think that’s meaningless are in for a surprise. Likewise, they are wrong if they think the positive divergences within the gold sector for the last several months are meaningless.
GDX:QQQ is breaking out of a good looking low that took 2 months to form:
https://stockcharts.com/h-sc/ui?s=GDX%3AQQQ&p=D&yr=2&mn=2&dy=0&id=p35497762563&a=978546851
The Canadian dollar has put in an inverted rhino horn that likely marks the low or very close to it…
https://stockcharts.com/h-sc/ui?s=%24CDW&p=D&yr=1&mn=5&dy=0&id=p34029694011&a=1117321715
Brixton is up 37% vs SILJ this month:
https://stockcharts.com/h-sc/ui?s=BBB.V%3ASILJ&p=M&yr=9&mn=3&dy=0&id=t7660813993c&a=1259019517&r=1664473191480&cmd=print
Please don’t release any news Brixton. Always kills the rally as people sell the news regardless what it is.
Hi Matthew, I noticed The US dollar is down today, we discussed that recently, nice!! Brixton is up, it seems to close slightly higher at the end of each day, that has been it’s trading pattern lately. The end of the month is tomorrow, I hope BBB will not disappoint. CHEERS! DT
Hello DT, Brixton looks good and is improving across all timeframes: daily, weekly, monthly, quarterly, yearly. I’d like to know more about Robert Friedland’s efforts at Hog Heaven. Cheers! 🍺
https://stockcharts.com/h-sc/ui?s=BBB.V&p=D&yr=0&mn=7&dy=0&id=p45366865977&a=1260390637
Bank of England boss Andrew Bailey is accused by angry Tories of being ‘asleep on the job’ while inflation soared
By Tom Witherow and John-Paul Ford Rojas – The Daily Mail – Sept 27, 2022
“It came as the Bank’s top economist Huw Pill gave a clear signal of a large interest rate rise when its Monetary Policy Committee (MPC) next meets in November. His comments appeared to rule out an emergency meeting before then to increase the rate in a bid to calm the markets.”
“But Tory MPs said dramatic increases were needed only after the Bank let inflation ‘bolt from the stable’ and allowed things to go ‘horrendously wrong’ last year.”
https://www.dailymail.co.uk/news/article-11256681/Bank-England-boss-accused-angry-Tories-asleep-job-inflation-soared.html