Jordan Roy-Byrne – Will July Be The Last Fed Rate Hike And Is Now The Time To Start Buying Gold And Silver Mining Stocks?
Jordan Roy-Byrne, Founder and Editor of The Daily Gold, joins us to discuss what market data has him fairly certain that the last Fed rate hike will be at the coming July meeting, and why he feels now is the time to start accumulating the gold and silver mining stocks. We discuss that with commodities having rolled over the last 2 months, and GDP growth slowing, that we are likely already moving into a recession. This is why some market participants have changed their stance from expecting a few more hikes, well into the first quarter of 2023, to now expecting 3 rate cuts in 2023. It is for those reasons that Jordan feels that the Fed will reach the point in the next few months where they concede that they can’t keep hiking rates into a recession, and reverse course.
When asked about if the precious metals stocks would continue selling off in sympathy with the general markets, now that they’ve started their secular bear market; he mentioned that if history is our guide, that precious metals stocks would likely diverge and start tracking gold higher as their secular bull market unfolds. Jordan wraps us up with a number of bullish comments that despite the immense pressure the mining stocks have been in lately, including today, he still believes now is the time to begin aggressively accumulating.
Click here to visit The Daily Gold website and keep up to date on Jordan’s technical outlook.
This is What Drives the Gold Price (Lesson 1)
Jordan Roy-Byrne CMT, MFTA – The Daily Gold – July 3, 2022
“Gold as an investment is simple to understand yet is muddled by the endless misinformation and disinformation from detractors and proponents alike. We often hear phrases such as “end of the world trade,” “just a rock,” “flight to quality,” “you cannot eat it,” “hedge for uncertainty,” “inflation hedge,” and “deflation hedge.”
Such phrases mischaracterize Gold and miss the simple fact that Gold is the ultimate money. Over 100 years ago, JP Morgan said, “Gold is money; everything else is credit.”
“Gold (and secondarily Silver) has lasted as money for thousands of years because it, better than anything else, fits the properties of money. It’s durable, divisible, convenient (portable), uniform and it has intrinsic value.”
“In today’s fiat world, Gold is money but, more so, an alternative currency that performs well when the value of fiat currencies or perceived value is declining. One way to track any currency’s current trend and perceived value is to compare it to the direction in real interest rates or real yields on government bonds.”
Phony transactions in the paper markets also major player in price setting of Gold and commodities.
For better or worse, the prices are set in the futures markets.
Deflation to Trigger Fed’s 180
David Brady – Sprott Money – June 30, 2022
“Simply put, the Fed’s measure of inflation including everything but food and energy is going south in a big way soon. This plus the recession already under way and rising unemployment—jobless claims just hit a five-month high—will force the Fed to reverse course to rate cuts and QE sooner rather than later, perhaps as soon as the Jackson Hole symposium from August 25th to the 27th.”
“With the rationale for monetary tightening unraveling as the economy heads south while unemployment goes north and disinflation is under way, the Fed’s current policy is running out of time.”
” The Jackson Hole symposium in August could signal the pending pivot back to rate cuts and QE, just as Powell did in December 2018. By then, the discounts will begin to show up in the core inflation numbers. A sharp drop in core CPI or PCE will make it hard for the Fed to continue its tightening policy but much easier to change course. Whenever it happens, everything goes ballistic, imho—everything but the dollar—and Gold, Silver, and the miners will be the biggest beneficiaries.”
“When you see those summer sales roll out and discounts that give you sticker shock, you know that the days of monetary tightening are coming to an end and the Fed’s next 180 is imminent. In essence, deflation will send the metals and miners to new highs, imho.”
https://www.sprottmoney.com/blog/Deflation-to-Trigger-Feds-180-David-Brady-June-30-2022
Axel Merk – Gold price tanks 2% as Fed may be ‘near the peak of its interest rate hikes’
Jul 5, 2022 – Kitco News
“Axel Merk, CIO and Founder of Merk Investments, discusses the recent gold price fluctuations, and broader macroeconomic trends with David Lin, Anchor and Producer at Kitco News.”
0:00 – Gold’s selloff
2:11 – The U.S. dollar
3:44 – Gold and equities
4:44 – Recession outlook
10:40 – Fed policy and inflation
13:08 – Fiscal policy
18:00 – Labour market conditions
23:56 – Stagflation ETF
25:23 – Gold price forecast
David Rosenberg – Imminent Recession – Extended Bear Market
Wealthtrack – July 1, 2022
“The S&P 500 ended the first half of the year with its worst performance since 1970, down more than 20%, cementing its bear market status. And the recession drumbeat is getting louder. This morning, leading Wall Street economist, Nancy Lazar told clients “a recession is coming sooner than you think” PiperlSandler’s Global Chief Economist blames “sticky inflation”, “very aggressive Fed tightening, and a “severe corporate profit recession” for her forecast of a mild recession with the economy contracting starting in the final quarter of this year into the first half of next year.”
“High inflation is at the top of the Federal Reserve’s, Washington’s, and Wall Street’s list. David Rosenberg says they are looking at the wrong numbers and that disinflation is already taking hold.
Interest rates are expected to go higher for longer. Rosenberg cites evidence of economic slowing which will require easing sooner than expected.”
Gold Deeply Oversold Relative to Commodities (CRB index) says Financial Historian Bob Hoye
Mining Stock Education – July 2, 2022
“Bob Hoye is a trained geologist, successful resource investor and economic historian. In this interview, Bob shares his research regarding why the gold price is deeply oversold relative to commodities as measured by the CRB index. Gold/CRB has registered downside capitulations and suggests a trend change. This change, Bob says, may occur within the next weeks or few months and could result in the multi-year gold bull market he has been teaching about for years. Bob has always said the gold bull market occurs after a deflationary crash in stocks/bonds which he sees as occurring right now.”
Oversold , ….. I would agree………… JMO
For sure OOTB. The mining stocks are even more oversold than Gold or Silver prices.
thanks for the info………. 🙂
My stocks have left the bottom of my charts. There is an occasional periscope that surfaces but quickly retreats. Waiting for some missile shots without warning.
Good one Lakedweller2. Ha! Yes, I feel like some of the fishing line selloffs we’ve seen over the last few weeks and even the last 2 days, have been “off the charts” to the downside, so hard to see where they landed.
I’ve never heard Jordan with a better flow of words, and anticipation, not hype. I’m encouraged, I’ve bought 3 issues the last 2 days after a 6 week void.
Agreed Marty. That last 5-10 minutes was about as bullish as I’ve ever heard Jordan… ever.
Personally, I’ve been nibbling at positions since last Thursday, Friday (in US dual-listed stocks), Tuesday in all sectors, and then today on Wednesday I decided to top up about 18 existing PM mining stocks today into the sea of red carnage….
That pretty much used up all my remaining dry powder, but I did move over a few funds from deep savings earlier this week, where I could potentially do a few more small buys. I’ve done a bit of horse trading swapping one stock for another or cutting back a big portion of one stock to refortify another as well.
At this point and as of today, I’m essentially 99% “all-in” at this point as far as my Precious Metals positions. I’ve also still got healthy positions in some Uranium stocks, and a handful of some Base Metals stocks in Copper, Nickel, Platinum, etc…, but the lion’s share of my trading portfolio is now in Gold and Silver stocks and royalty companies.
In a way I feel pretty good just having finished staking my claims today for the most part, and now I can just see how things develop from here. It’s kind of relaxing and cathartic in a strange way.
Ever Upward!
Ex, I thought you might find this post by Clif High interesting. I put a link on the political side, but think it speeks well to the financial forum. “PANIC” covers all bases!
https://clifhigh.substack.com/p/panic-2022?utm_medium=email&%3Butm_campaign=cta&%3Baction=share&utm_source=substack
Hi kitk. Thanks for posting that Cliff High editorial, and yes, the “Panic” he references hits the economic bases as well. There sure is plenty of panic in both the geopolitics and financial markets these days.
It’s best for everyone to have a strategy and preparedness plan in place for their families and friends, as we are likely going to have to sail in some turbulent seas in the next year or so. (not that the last 2 years weren’t also pretty rough waters).
Ever Upward!
Always good to stay informed………….. with all the FAKE GOVT crap going on…….
Rickards out with info on the new digital currency ……. that was signed into a bill under Biden , MORE TRACKING, like the Chinese model…………
info……..is at zerohedge…….
Note,…. gold is still a valued holding………
West African Resources (WAF:AX) down 9% Wednesday AM and noticed Sprott had sold it recently. Also FSM, which is also active in that area also seems to be down more than others. I wonder if something is going on over in west Africa, which could be negative for miners there or is it just normal.
Thursday, not Wednesday AM
I actually added a little to my FSM position today, and am not worried about where they are operating in West Africa. The old Roxgold assets are actually a big reason I got back into FSM, and they’ve been performing above average. In general, many of the companies operating in a number of West African countries have gotten more accomplished, more mines built, more permits issues, and made more progress than many North American or Latin American countries have, so the penalty they trade at in valuations due to the perceived jurisdiction risk, is a bit out of wack IMO.
As for whether a stock being down 9% today is cause for concern… not really, as it’s across the board selling. There have been PLENTY of good companies down high single digits or double digits on Thursday of last week, and again yesterday on Tuesday, and today on Wednesday where nothing fundamentally had changed for those companies at all.
For example, Integra Resources was down nearly 9% on Canadian exchange (ITR) or over 16% on the US exchange (ITRG) for no discernable reason today. Nothing changed at all, but a huge amount of value was just simply evaporated due to selling pressure.
These are just the kinds of markets we are in right now, and why I’ve been aggressively buying the last few trading sessions, and shot off most of my dry powder that was left today. I certainly didn’t feel like I was overpaying for the 18 positions I added to, and it may not be the bottom yet, but we are seeing some valuations that are catching everyone (including the companies we speak with) very much by surprise. With everything so oversold here, my thesis is we are days away from a bounce, and might even see one by the end of this week or the beginning of next week.
Like Jordan said in the interview today, if it is a few days away or a few weeks away, we are close to a bottom, and in his opinion this is the time to be buying. I concurred and was on the buy all day. If we have a few more weeks of pain, then so be it.
As of today I feel like I’ve gone through my portfolio topping up my positions and “stuffed the stockings by the chimney with care, in the hopes that St. Nicholas soon would be there…” 🎅🎄🎁
So far so good… as my trading portfolio is up around 5% on the day… Christmas in July?
Sprott’s PSLV hit its largest discount to NAV today since November 2020 at 4.56%.
Silver’s downside risk is probably about 6% from today’s close (around 18 for silver and 16.50 for SLV).
https://stockcharts.com/h-sc/ui?s=%24SILVER&p=W&yr=6&mn=0&dy=0&id=p95704912552&a=862056438
The “Gold Miners Index Stocks Above the 200 Exponential Moving Average” is at zero for only the 4th time since stockcharts began showing it 5 years ago. This is the third week at zero and I’d bet this low will be much more significant than the last three.
https://stockcharts.com/h-sc/ui?s=%21GT200GDX&p=W&yr=6&mn=0&dy=0&id=p65707021868
That’s an intersting chart and observation on the 0 reading. Thanks for sharing that Matthew.
Yes, this coming bottom should be a significant one, and will likely be a key intermediate bottom, that starts the next impulse leg to new highs. Bring it on! Haha!
Ditto……….. on the chart……… thanks
Here’s the non-log version for more detail:
https://stockcharts.com/h-sc/ui?s=%21GT200GDX&p=W&yr=6&mn=0&dy=0&id=p08929489326
If anything is about to crash, it’s probably copper versus silver as well as CRB versus silver.
https://stockcharts.com/h-sc/ui?s=%24COPPER%3A%24SILVER&p=W&yr=7&mn=8&dy=0&id=p32879508428&a=1058324121&r=1657164060940&cmd=print
Silver hasn’t made a new low versus the CRB in a month.
https://stockcharts.com/h-sc/ui?s=%24SILVER%3A%24CRB&p=M&yr=25&mn=11&dy=0&id=p72611152396&a=1189668128&r=1657164283881&cmd=print
Trends : https://tinyurl.com/4ypebbv9
Dollar Pause. Possible PM Pop.
Gas & Oil Rocket Ready?
JRB Now Bullish??
Agree w that post-it BDC…after listening to Bob Hoye above I will be focused in JNUG trades…glta
I still cannot synch my browser update w chart posts…glta
Gas Rocket : Early Launch!
Gold Stocks are Extremely Oversold
Jordan Roy-Byrne CMT, MFTA – The Daily Gold
https://thedailygold.com/gold-stocks-are-extremely-oversold/