Jordan Roy-Byrne – Precious Metals Have Bottomed But Are Consolidating The Recent Rally
Jordan Roy-Byrne, Founder and Editor of The Daily Gold, joins us to discuss his technical outlook on gold, silver and the precious metals mining stocks. We start off reviewing the recent corrective action in the PMs, after seeing silver stage a very constructive run off it’s $17.41 low in early September to close at $23.25 on Friday last week, and after seeing gold make a $200 move from $1618 in early November up to $1818 intraday last week. Jordan sees the resistance at the 200 day and 400 day moving averages as having been a factor in not just the metals retracing some of the move, but also in GDX and GDXJ turning down around those levels.
We then discuss if it isn’t more important for the recent bounce to be consolidated in time up at these higher levels, more so than at a specific price level. Jordan makes the point that while price and moving averages are important, that it is also very important to consider breadth indicators and inter-market analysis between gold and S&P 500, GDX and the S&P 500, the gold:silver ratio, and how these are reacting to recession concerns, and the eventual decoupling of the precious metals sector from the US general equities markets. Even if the recent consolidation takes a few more months of muted to corrective action, overall it appears that the bottom is in for prices in the sector.