Jordan Roy-Byrne – Could A Big Move Down In General Equities Pull Precious Metals Down With It This Year?
Jordan Roy-Byrne, Founder and Editor of The Daily Gold, joins us to review if a large move down in general equities, whether from recession pressures or a black swan event, could pull precious metals down with it later this year. This seems like an improbable outcome, after considering both the fundamental and technical factors that demonstrate gold, silver, and the PM mining stocks have clearly bottomed and are in a new uptrend. While there will be corrections within a secular bull market, there is nothing on the charts or the macro landscape suggesting another big “wash out” event being needed for the sector to move higher.
Another aspect we consider, when looking at the last few historical crashes in PM prices, was that they were much more widely held coming into 2007-2008 and 2011-12, before the following capitulations, than the PM sector is held currently. Now, over a decade later, most institutions and funds have far less exposure to gold, silver, or the PM equities, and the volumes and participation has been substantially lower, so there are less potential sellers sitting on gains even available to provide the fuel for a large crash in prices from here.
There is no technical or quantitative data that Jordan is reviewing which remotely suggests that we are going to see a massive crash in any markets at present. He mentions that it is far more likely that as the Fed pauses it’s rate hikes, and then eventually pivots back to rate cuts, that the general equities will top and roll back over in another leg lower, but that gold and the mining stocks will diverge and continue to outperform, like we’ve seen the last few months.
.
Click here to visit Jordan’s site and keep up to date on his market outlooks.
Never say never correct in PM world. Just when you think it’s safe to put your cowboy hat on, market will slap you in a hot second. One thing I have learned trading/investing in PM, trust no body because nobody knows anything!
A solid point CaliJoe. Jordan makes that same point in the interview that nobody can predict the future, but that we need to look at data and probabilities, and that at present, that there is nothing pointing to a big crash sucking gold, silver, and the mining stocks down to new lows in a “final washout” type of capitulation event.
We already had 2.5 years of capitulation from the August 2020 highs in the sector, and last year we had the very notable 7 months down in a row in gold, which did plenty to wash out sentiment across the sector.
As we pointed out in late September, the DSI Daily Sentiment Index was down to single digits for both gold and silver at the same time, and the BPGDM hit a reading of 7%, and most of the widely followed stocks in the indexes were near 52 week lows and there were near 0 of the big boys hitting 52 week highs. The juniors were in even worse shape with many down 60%-90% in just 2 years off their highs, so I’d submit that was plenty of capitulation last year in 2022.
Most of the selling has been exhausted at this point, and there just aren’t a ton of traders sitting on huge gains in the sector, like there were in 2008 or 2012-2013 when things dove down hard.
More recently, we’ve seen Silver rally from the ridiculously oversold $17.40 area in early September, to launch up $7 bucks in just a few months for a massive recovery above $19, $20, $21.41, and $22 resistance levels. Then GDX and GDXJ, and most of the larger more liquid gold and silver stocks got the memo in mid to late September by bottoming and climbing higher since then for the last 3.5 months. Gold took until Nov 4th before finally triple bottoming at support, at $1618, and quickly reversing up over $200 in a month, making it a false-breakdown below $1675 and a bear trap.
Based on the Fed winding down their rate hiking cycle over the next 2 meetings of Feb 1st or mid March, and then likely taking a pause to assess, and in lieu of all the geopolitical rumblings, persistently high inflation, economic contraction in housing/manufacturing/retail, and the waves of firing in some of the larger companies, then the PMs seem like a reasonable place to be invested as 2023 unfolds.
All one can do in any market, is place one’s bets with the technical data, quantitative data, and fundamental data, and set one’s sails to ride in the turbulent seas…
One thing you should consider, is that things have come to such a pass that if they raise the rate still further, they not only ran the risk of bringing about a terrific smash,
IPT finished up 7.5% today while everything else struggled. It put in its highest close in 5 weeks on good volume but more importantly it put in its best close relative to the 200 day MA in almost 9 months.
https://stockcharts.com/h-sc/ui?s=IPT.V&p=D&yr=1&mn=1&dy=0&id=p68908577385&a=1322429712
+7.5 A very nice move today in Impact Silver indeed. It’s still one of my largest portfolio positions, and when it moves it really moves. Nice to see the bigger volume and the move relative to the 200 day moving average, as you outlined. Thanks for the chart Matthew.
Another Silver producer that really moved nicely today in my portfolio was Gatos Silver (GATO), up over 10% on the day. GATO has doubled in price since making it’s September lows last year.
We also had Andrew from Blackrock Silver on the show today, and while it is more of a silver and gold exploration play in Nevada, it was nice to see (BRC) up about 10% on the day [up 9.68% at the close].
3 other Silver explorers in my portfolio, that we’ve also had on the show for interviews in the recent past, that had a nice moves were Silver Tiger (SLVR) up 6.67% today, Vizsla Silver (VZLA) up 5.77% today, and Dolly Varden Silver (DV) up 4.88% today.
Nice to see some of these Silver stocks bucking the trend on day when Silver was down.
Another observation from today was that some of the smaller gold producers and the gold developers had some nice moves on the day, with some double-digit gainers and a number of respectable single-digit gainers on a day when the majors and ETFs with larger-cap stocks were much more muted.
Like Dave Erfle mentioned in yesterday’s interview, some of these junior PM mining stocks are ready to start moving higher and get rerated, regardless of the trends in larger mining ETFs. It’s nice to see a little life coming back to this sector.
Emo had a good day…many things to think about there. It appears underpriced.
I was going to mention EMO as well Lake…….and I was actually hoping it wouldn’t start moving up til Magna reached closer to fair value. Wanted to get more while it was a redlight special…..only so much cash to spread around……looks like EMO is set to make its next run tho so I’ll have to enjoy the ride with what I’ve already got.
Nice to see the way Impact is trading as Mathew mentioned…….I also noticed that MPM had a huge volume day and looks like the big fund seller is finally completely out. Tomorrow’s inflation numbers hopefully are the catalyst to get through $1900 gold. Cheers
Wolf:
Yes. I am in my second round of taking losses in Emo and have another week. I loaded some shares in Emo to be able to maintain share balance after the 31 day sale wait. The plan was to take the Emo sale and move it to Magna, but it has run away. I may just leave them in Emo if they don’t smash it back for the 57th time in less than a year. Or if one of my others like Nine Mile, Fussion 3.0, Surge Battery, etc gets on a roll, may move it there. Last year I got caught with too many profits in January, which was a real problem when everything got walked back all year. I did not want to pay taxes from an account that was worth a lot less at tax time. This year is going to be tax loss season all year long to offset profits as I go. Right now I am playing musical chairs with profits to add shares to those that are showing gains … which means I have to take losses also. As long as the game is rigged, the market is only as good as the last 10 minutes.
Lucky for me I’m only dealing with tfsa and rrsp accts so taxes aren’t involved…….and in the description of insanity I think this time is different for EMO……. way too much news from the drills coming that I don’t see it below $1 anymore once it breaks it this time.
A Mid-Tier Producer To Buy On Dips $AR Argonaut Gold
by @TaylorDart on 31 Dec 2022
https://ceo.ca/@taylordart/a-mid-tier-producer-to-buy-on-dips-ar
Copper has been doing better lately, back up over $4 (currently at $4.15).
Also the larger Copper producers have started gaining traction lately as seen in the ETF (COPX).
COPX got down to $25.72 in the summer, then retested that general area at $26.40 in late September, making a W-shaped double-bottom of sorts. Since then it has surged higher to close today at $40.20.
FTX Says It Has Located More Than $5 Billion in Cash, Liquid Assets
Becky Yerak • Wall Street Journal – 14h ago
“Bankrupt cryptocurrency exchange FTX said it has located more than $5 billion in cash and other liquid assets and is hoping to sell hundreds of additional holdings with a book value of more than $4.6 billion.”
“Those assets are valued as of FTX’s bankruptcy filing in November and don’t include $425 million held by authorities in the Bahamas, company lawyers said on Wednesday in the U.S. Bankruptcy Court in Wilmington, Del. FTX lawyers also told the judge overseeing the bankruptcy case that the amount of the shortfall in FTX customer funds isn’t yet clear.”
TURNS: https://tinyurl.com/52euebw7
Likely NatGas Bottom.
PMs Strong.
https://www.youtube.com/watch?v=hfLbnstPChM
Larry Pesavento agrees on NatGas.
Deep NatGas retest, or wrong and lower.
Wrong. Lower.
I fully expect Semis to break this resistance line. Doc, I would cover shorts if I were you.
https://stockcharts.com/h-sc/ui?s=SOXX&p=D&yr=1&mn=1&dy=0&id=p45990360313&a=1327957508&r=1673532891001&cmd=print
So many rug pulls for silver miners. they have underperformed everything for so long it’s hard to see the light at the end of the tunnel.
At least for EXK and AG, I am expecting them to test their 100 dmas in the next couple of weeks if not sooner.
Brixton is a buy here IMO. It’s very oversold on the daily chart. In a strong trend, you buy the first tag of the 50 dma every day and Sunday IMO. Brixton and HL have been by far and away the best technical performers for me. unfortunately, they are not my largest positions. there is nothing even remotely bearish on their charts unless your time horizon is 2 weeks or less. If I had every penny in Brixton and HL I would sleep so much better.
Brixton, BBB, chart. The slows are deeply imbedded and may be the rocket ship the share price needs to launch upwards eventually, IMHO. Their land package is showing huge potential.
Big Ridge, BRAU, someone is finally interested in this left for dead stock.
Still range bound. Close to break out, but also close to retracement again. Will see if this time is different. However, back to taking profits.
Took some gains and picked up some more shares of Fission 3.0 at less than 50% cost after considering the profits. Simultaneoulsy, wiped out the losses I took earlier in the week, so back to a sit until my 31 days up on Emo when I will take some losses….then take some gains.
Added a few Nine Mile also.
Cory/Shad: Thanks for adding the “address screener” into the program. Worked for me this morning.
Santacruz, SCZ, is also looking like a buy soon with their slows starting to imbed IMHO.
The yen is up 2% so far today. That is an insane move.
I think biotech is setting up for a trade of the year
https://stockcharts.com/h-sc/ui?s=LABU&p=D&yr=0&mn=7&dy=0&id=p36452130784&a=1318227622&r=1673542649909&cmd=print
Emo back on track again … maybe soon a breakout to my account. Emo is the key signal.
So much for all those thoughts.
GDX stalling at the resistance line
https://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=0&mn=11&dy=0&id=t4767378449c&a=1328332152&r=1673548773865&cmd=print
Daily is not showing overbought and not worried
slv:$xjy (silver priced in yen) looks like it is going to explode upwards soon (in less than 1 month IMO).
the weekly chart looks even more bullish than the daily chart.
Jordan is naive…Imho
.The fed wants the economy to greatly diminish…It’s all by design….Tikkun Olam..Sincerely Poppie
Z-Z-Z-Z-z-z-z …
What Can Stop Gold Now?
Jordan Roy-Byrne CMT, MFTA – The Daily Gold – January 05, 2023
“In our last article, we noted that Gold is outperforming everything. It is trending higher and positioned above rising 200-day moving averages when charted against the stock market, bond market, commodities, and foreign currencies. Yesterday it closed at a fresh two-year high against the conventional 60/40 portfolio.”
“To be sure, on a technical basis, nothing will be able to stop Gold when it breaks to a new all-time high. Such would confirm the most significant Gold breakout in roughly 50 years. However, I am more focused on macro-fundamental developments that could stop Gold today.”
“I don’t see anything.”
“Consider the negatives Gold has dealt with over the past year…”
https://thedailygold.com/what-can-stop-gold-now/