Jayant Bhandari – Reevaluating The Overall Narrative For Gold, Resource Companies Trying To Conserve Cash

October 19, 2022

Jayant Bhandari, Private Investor, joins us to share his thoughts on the gold narrative we have all heard where high inflation and negative real rates should be major drivers to the gold price. Unfortunately over the past few years we are decades high inflation and deeply negative real rates but gold has not gone to all-time high price levels. It’s been the US Dollar that has been the safe haven play. This has us discussing what could actually drive gold and how the precious metals could diverge from the broad markets.


We also discuss the environment for the the resource stocks. We keep hearing that companies are holding back on news and conserving cash. Jayant shares what he is looking for and would like to see in terms of the sector.





    Oct 19, 2022 19:11 PM

    Gold’s 300 WMA is a very likely next target at $1549, which cold come within weeks.

    Next would be the 600 WMA at $1467. The 400 WMA is about $5 below that but will hopefully make a positive cross soon. Short of a crash, it could take a number of months to get to that level.

    It appears gold is at the mercy of the 10 year yield. At this point, who’s to say what stops the ten year yield from making higher highs. As long as the Fed continues to tighten and the rest of the world stays relatively easier, it’s probably going to continue to climb ever higher. The only thing that might stop it is if unemployment worsens, because apparently no one cares about negative GDP.

    I should have bailed on miners the day the Fed raised rates and initiated QT, because I’m sure many investors’ investment thesis (including mine) was built around the Fed being unable to hike rates or shrink their balance sheet.

    Well here we are and the miners continue to look like nothing more than a great way to hedge a long US stock portfolio (short miners, long US equities). GDX is on the cusp of making a fresh multiyear low vs the Dow and looks likely to at least test the March 2020 low in that ratio soon.

    The irony of gold bugs thinking mining stocks would be some sort of safe haven from carnage in bonds and stocks. Heck, GDX is plunging vs junk bonds (HYG)! We are in all likelihood going to get some sort of multiweek waterfall vs just about everything else on earth very soon.

    Oct 19, 2022 19:25 PM

    And dowwwwnnnn the tubes the PMs go again.
    This won’t stop until rates stop going up, which they won’t for awhile, and oil prices fall, which it won’t for awhile.
    Just wait until December, if you think your PM stocks have been hit hard already… well, you ain’t seen nothing yet.
    You still have a chance to sell, so why don’t you? You’ll be able to avoid the 30 day rule and buy back in December at much lower prices.
    Just do it, sell.
    And do it NOW!!!!

      Oct 19, 2022 19:01 PM

      I am up so far this week. I just can’t quit in the middle of a hot streak.

      Oct 19, 2022 19:30 PM

      Joe, you need to unwind and watch Gene Gene The Dancing Machine! LOL! DT

        Oct 20, 2022 20:05 AM

        That Gene Gene The Dancing Machine made me chuckle DT. Thanks! I needed that.

      Oct 19, 2022 19:21 PM

      Not going to lie, things look bearish as all get out in the near term.

      What is the catalyst for higher metals prices? The only one I can see is falling yields. And the only way we get falling yields is if the stock market or employment absolutely implodes, which has high odds of taking gold and the miners down too. Otherwise, shorts have the green light to sell with impunity.

      To add insult to injury, gold and silver have been probably the two worst performing commodities since yields bottomed.

      Until the Fed breaks something, I don’t see any catalyst for higher metals prices other than short covering, which for gold is probably a long ways off yet. If someone disagrees, I would like to know what is going to send gold on to make higher highs? If there is no Fed pivot coming, expect to see lower lows and lower highs.

      Does the Fed just keep raising rates and allowing QT to proceed? because if that is the case, the metals look terrible. If you think metals will rise in the face of that, whats the basis for that?

        Oct 19, 2022 19:50 PM

        I can’t provide any help for what will drive the metals/miners one way or another as markets are intervened in every day. One lie begets another, but a computer program or two can turn things on a dime. For a better answer, you will need to contact those that are on the winning side of trades most every day.

    Oct 19, 2022 19:55 PM

    I am holding on for the day when all the US markets are caught in a short squeeze at the same time. It will be interesting to see how The Fed handles the situation. I don’t think the Fed building is that tall.

    Oct 19, 2022 19:48 PM

    What will drive the gold price in the future is The Central Banks in the West will need to go back to a gold backed currency. DT

      Oct 19, 2022 19:10 PM

      They will never think of that….it does nothing for funneling the Treasury to their friends.

      Oct 19, 2022 19:12 PM

      that’s been the principle the gold bugs mantra, the return of the gold standard since the beginning of time.
      It will have it’s pop when THEY decide the dollar rise has done enough damage and goes down for a time.

    Oct 19, 2022 19:32 PM

    Gold and the miners are on the cusp of letting lose on the downside. Tomorrow and Friday will likely be very very ugly. Today’s candles are suggesting another waterfall lower.

    Oct 19, 2022 19:42 PM

    To make matters worse, gold:GCC and silver:gcc look like they are both ready for a new leg lower as well after a 5 months sideways consolidation.

    The Fed has simply toyed with gold bugs. Owning physical is one thing, but the miners have been beyond disastrous. I am sure after another 50% haircut people will crow about them being up 30% in a month.

    Oct 19, 2022 19:52 PM

    Silver is at the same level vs GCC as November 2009. Let that sink in.

    If silver and gold really are in a bear market now vs the commodity complex, why buy gold and silver miners instead of copper miners or wheat futures?

    Oct 19, 2022 19:01 PM

    Yes …….I agree………………..the COMEX is a casino that sets the price of gold by interests that have no intention of taking delivery……………’s a great manipulative tool the the bullion banks have been paid to do………………forget any notion of free markets !! Algo’s set to trade inversely to rates and USD in guaranteed fashion………..

    1500 zone gold is in the cards as 1.5 to 2 percent will be tacked on by the FED over the next 3 or 4 months…………………USD will be the go to currency even more as Euro tanks into next year…and even more capital will flow to USD…………….yen is hopeless and in fact finally welcoming inflation…………..realistic to see double top of USD index of 120 at least going back to 2001. These are my targets, subject to be proven wrong…………………

      Oct 19, 2022 19:10 PM

      nothing to do now but wait for gold CoTs to hit zero or even net long before any hope of a bounce.

      This is playing out like 2013 in slow motion.

    Oct 19, 2022 19:26 PM

    Gold has let everyone down………….except those that are rigging the price !

    To think that the planet has over 50 trillion dollars in sovereign debt that was supposed to be so safe and guaranteed by you know who……………….the total value of which is deteriorating rapidly in the markets and in terms of massive under performance with all yields way under the inflation rate…………do you really think this is sustainable ?…… and secondly……….does anybody expect anything different from people who borrow with no intention of ever paying anything back……………biggest scam of the last 70 years !

    Gold just may get a wake up call when the chickens start coming home to roost……… entrenched stagflation !
    Still too many sheeple believing in the system……….and don’t believe yet that we are entering a serious stretch of financial repression…………..I’m in Tavi Costa’s camp………….

    Oct 19, 2022 19:56 PM

    Gotta love all the concern about gold’s future. I’ve been doing a lot of buying. Monthly TSX-V looks great:

      Oct 20, 2022 20:08 AM

      You said it Matthew. Boy it sure is getting really bearish in many of the comments… Geesh!

      Gold and the PMs may still remain under pressure, but they aren’t going to zero.

    Oct 24, 2022 24:17 AM

    Great episode, guys! (as I mentioned on twitter)

    Do you guys have a twitter handle? (I would have tagged you if I knew what they were)