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.