Jordan Roy-Byrne – The Path Of Equities Bear Markets, Allows Gold To Decouple Into A Bull Market
Jordan Roy-Byrne, Founder and Editor of The Daily Gold, joins us to discuss technical levels in the precious metals sector, as well as the macroeconomic factors that have his attention. Jordan highlights a few support levels he’ll be watching for in gold, silver, and the mining stocks, but emphasizes he’s more interested in the macro drivers of the markets and interest rates in response to the continued Fed rake hiking cycle, and at what point they’ll be forced to reverse course.
We explore some of Jordan’s research into the path that prior bear markets have taken, why we could be near a bear market rally in general markets, which is then proceeded by a more significant move lower. We discuss why that roll over in the general markets and would be bullish for gold and allow it to decouple from the general equities. One key level Jordan is watching in the S&P 500 vs Gold ratio chart is the 200 day moving average, and he explains how this should be instructive for watching the decoupling of the markets from the precious metals.
Click here to visit Jordan’s site and keep up to date on what he’s watching on the charts.
Vince Lanci – Why Fed Insider Zoltan Pozsar is Bullish on Gold & More
TheDailyGold w/ Jordan Roy-Byrne – May 20, 2022
(KRR) (KRRGF) Karora Resources: An Upgrade To The Investment Thesis
Taylor Dart – Seeking Alpha – May 25, 2022
“Karora announced that it would be acquiring the Lakewood Mill this week, giving it a second mill and an immediate boost to 2.6-2.8 million tonnes per annum of processing capacity.”
“This is a brilliant move by Karora’s CEO, Paul Huet, providing potential haulage cost savings, de-risking the growth plan, and beefing up the company’s long-term potential. While the medium-term growth outlook is the same with Lakewood, assuming HGO’s reserves can support an expansion, Karora has 250,000-ounce potential long-term with a mill expansion down the road.”
“Given that Karora has a rare mix of growth combined with likely margin expansion, I would view sharp pullbacks as buying opportunities.”
https://seekingalpha.com/article/4514507-karora-resources-an-upgrade-to-the-investment-thesis
This is an interesting transaction on one of the better growth-oriented gold producers, and while there was some grumbling from the financing announced today (to help fund this acquisition), in this case, the dilution is justified to ramp up production and further lower costs, so it’s a good use of capital.
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(KRR) (KRRGF) Karora Resources Announces Agreement to Acquire the Lakewood Gold Mill and Significantly De-Risk Growth Plan
24 May 2022
https://ceo.ca/@newswire/karora-resources-announces-agreement-to-acquire-the
Fed minutes show strong commitment to 0.50% rate hikes in June, July
Brian Cheung · Wed, May 25, 2022
“The Federal Reserve made a strong commitment to 0.50% moves in June and July, according to minutes from the central bank’s May meeting released Wednesday afternoon.”
Now the Fed doesn’t have to raise rates when the time comes. They can alter the scenario later.
Yes, I’m sure they’ll deviate from their plan later on, but for June & July it’s probable that they’ll do a 50 basis point hike at each meeting, taking the Fed funds rate up an additional 1% from where it is now. For the most part that is already priced in by the forward looking markets. Then at that point they can either follow it up with another 25 basis point hike, pause the hiking and try and jawbone the markets into submission, or stop the whole thing altogether. It likely won’t be until the fall or winter until they actually reverse course and start cutting rates again or doing QE again though.
Since they’ve already done a 25 basis point and a 50 basis point hike so far for a 0.75% FFR, then I could see them doing an additional 25 basis point hike in September, after the 100 points in June/July which would take the Fed funds rate up to a 2% rate overall. At that point the 10-year would likely be somewhere around a 4% rate, and maybe the rate of expansion in the CPI readings will come down from over 8% to 7% or 6%. Personally, I can’t see them getting too far past that point before the markets throw a big enough tantrum to derail their remaining tightening. It will depend on the GDP growth numbers, employment numbers, PMI, PPI, CPI, and PCE as to how far the charade goes…
Ex:
Probably right that The Fed will go on with the show as what does +1% mean in the scheme of things when negative rates are controlling. They can still intervene in Forex and General Markets and counter their own actions (and continue bail-outs of who knows who under the table).
Yep, the show must go on, as they say…. At this point almost everyone expects the 2 more 50 basis point hikes, so to not execute those would be silly on their part, as they are baked in the cake at this point.
Agreed, in the overall scheme of things, a 1% lift in the Fed funds rate won’t do much, and even if the 10 year treasury moves up to 4%, we’ll still have deeply negative real rates when adjusted for the rate of inflation, so not much will change. The real question is how far will they keep going after that, and most people we speak with feel it won’t be that much further.
Commodities In ‘Perfect Storm’ Says ERG, As Crisis Starts Super Cycle
Reuters | May 25, 2022
“Years of under-investment in mining of metals essential to energy transition, supply shocks and high energy prices will continue to drive commodity prices higher,” Eurasian Resources Group (ERG) Chief Executive Benedikt Sobotka said on Wednesday.
“Sobotka said that a commodity super cycle has now begun and will carry on for the next 30 years, predicting a 20% rise in copper prices by the end of 2022.”
“Luxembourg-based, privately-held ERG is a global supplier of copper and cobalt. It also supplies alumina and iron ore and is the only producer of high-grade aluminium in Kazakhstan.”
https://www.mining.com/web/commodities-in-perfect-storm-says-erg-as-crisis-starts-super-cycle/
While I agree with the longer-term thesis for the still unfolding commodities supercycle, if we see a recession develop over the next 12-18 months, then that may take some of the steam out of the move in commodities, but in particular, the commodities linked to both food and energy should still have a pretty good floor of support.
(GRSL) (GRSLF) GR Silver Continues to Deliver Wide, High-grade Drill Results at Plomosas: 6.5 m at 1,458 g/t Ag Including 0.9 m at 3,118 g/t Ag in PLIP22-013
24 May 2022
https://ceo.ca/@newswire/gr-silver-continues-to-deliver-wide-high-grade-drill
The KOLD reverse split was only 4:1
and BOIL was left unchanged above 120.
This must mean that Proshares analysts
expect NatGas will turn lower soon.
(A final push higher is possible.)
Back into Metallic Minerals and Volcanic Gold today. Volcanic still not clear on local issues in Guatemala but the CEO had an interview with Rick Rule. Appears Rick Rule is still an investor. Years ago I was invested with Ivanhoe in the Congo. Some of same type issues and Rick Rule continued to hold and I left at $3. It is over $7 US currently in a suppressed market. VG down to around .25 US and all things equal is a great price. However, they are not equal yet. The CEO is going to go ahead with a “early” estimate on the resource while they continue talking with the various communities involved. Obviously risk so be prepared to lose your beer money.
Another positive day in Nevada Sunrise without news or explanation. Careful but may want to monitor it.
Matthew:
Good call for possible end of week positive activity.
Thanks LD2. Now stocks are due for a decent countertrend move which should alleviate some of crash fears out there about our miners.
https://stockcharts.com/h-sc/ui?s=%24COMPQ&p=W&yr=5&mn=0&dy=0&id=p64138044333
However, near term, I still wonder about gold, silver and the miners retesting their lows or at least attempting to.
Argh…I was approaching the door of the Maserati dealer and read your post and diverted to the coin shop just in time.
Good move; I can’t apologize!
There is a new Aston Martin dealership in my Guangzhou neighborhood, doing good business. You could buy a house for the same price as one of those.
I think the One-77 goes for about $2M…
https://cdn.carbuzz.com/gallery-images/840×560/652000/0/652022.jpg
That’s if you can find one. Otherwise you might have to part with $3M for the Valkyrie…
https://media.evo.co.uk/image/private/s–cMFIzPWi–/v1628843989/evo/2021/08/Aston%20Martin%20Valkyrie%20Spider%20Monterey-9.jpg
Is Guanzhou anywhere near Tennessee as I don’t want to drive any farther than that to check one out.
2 hour /GC chart…..I will buy the 1820 level into miners…..this area in my method is called low risk….if price fails to hold for 2 bars…i exit and try an other level…..the dollar day is today TD7 count…so dollar buy could occur today thru tuesday…and visa versa for EURO…glta
I think the dollar will go lower before it has a decent bounce.
UUP
https://stockcharts.com/h-sc/ui?s=UUP&p=D&yr=1&mn=3&dy=18&id=p28837493046&a=1097450982
The first UUP chart shows a little bull trap based on a speed line and this one shows another based on a fork (and that’s here nor there, just an observation)…
https://stockcharts.com/h-sc/ui?s=UUP&p=D&yr=1&mn=7&dy=11&id=p41749274510&a=946507212
The Canadian dollar looks good and is about to activate a head and shoulders bottom. If it does, it could be hard for the miners to fall much.
https://stockcharts.com/h-sc/ui?s=%24CDW&p=D&yr=0&mn=11&dy=0&id=p28084751848&a=1173355739
Todays action is exactly what it said these last few days. Everything is noise in the background and the charts are telling me that we are in a consolidation/Oscillating region and if we finished here for the monthly is be fine with the red candle.
I don’t see the miners making another lower low here due to time. The gas peddle is about to push down and I expect second week of June maybe first to really get going and I see only higher highs and lower lows being put in. But what do i know lol. Again not investment advice but everyone is scared and giving it one more tickle me drop should be enough but won’t break lower low imo.
Usd headed to .97 first possible slightly lower but will take 3/4 monthly candles to get there giving the equities market another push to possibly all time highs or just short of it. This will be gold and silver but more specifically the miners moment the One many have been waiting for. They have bucked everyone including news letter writers and the most bullish of them. This move is the one you say I’m glad I hung on and bought more at these depressed levels.
Glen
I highly doubt that stocks will get near a new all-time high. That would take a serious effort by the plunge protection team as this environment is not like any we’ve seen in the last 40 years let alone the last ten.
I agree Matthew but they will make it bounce enough to trigger retail back in and dump these a holes as you say plunge protection seem to always have an ace up there sleeve but there cornered now.
Thanks for the charts Matthew keep them coming!
Hey Glen..
I Have a dumb question.
……. you said……” I see only higher highs and lower lows being put in”
Are you sure, you mean…. “lower lows”……….. or should that be …..higher lows …in June….
Just asking…. no complains … just want to make sure of …my thinking….
appreciate…… Your pal…… 🙂
Jerry 😀
Great catch amigo lol! Yes you are correct I expect to see moving forward higher highs and higher lows. For example I don’t expect the most recent lows to be broken.
I’m in the camp that we have started the intermediate move higher but it currently is playing mental games as always to buck as many of possibly going down to $1832 I can’t see much more downside then that. But you never know. Just sharing what I see.
Also to many people were and are super bullish on usd and it has put In an I remediar top imo and is headed lower for 2/4 months from what I’m seeing please don’t shoot the messenger 🙂 that correction is what will start the fuel for gold/silver and the miners as well as a good bump higher on equities with the bearishness of late. I think down the road usd and equities inverse and you have a scenario we’re miners and gold/silver move up with usd.. Remember the miners never had there moment while every other commodity was on fire so the miners started there decline almost 2 years ago. I’m not of the camp that 3 year cycle low for gold/silver is before us if miners topped so far back. I see this as a bearish setup and it has been showing up on many charts with bearish traps as Matthew illiustrated yesterday. I sense a 6-9 months lift off while many will be worries and this move could be a serious move for the long awaited players including myself. Fast quick and to the point lol. Gold possibly $2220-$2240 is my first target if this move transpires which probability’s puts it at a high.
When we get there we will need to prepare and see what’s next. Step by step
Say hello to the orphan section I appreciate all you guys write 🙌💪
Hello Glen…………
Thanks for the reply…. Now I feel better…..on the higher lows…… 🙂
Just wanted to make sure, now we are all on the same page, of course I am NO CHART EXPERT for sure..
Just trying to keep in the right direction…
And Ditto……on…………”Remember the miners never had there moment while every other commodity”
Again……… thanks for the reply
It gets lonely……. as an ORPHAN…. lol……. see ya mate…… 🙂
increased my existing holdings from a third to 50%.
If your referring to the miners i believe you will reap the rewards in the not to distant future!
Reduced my cash from $59 to $43 after several trades.
+ 6.2% today. .. finally
Path of Bear Market in Stocks & How it Impacts Gold
Jordan Roy-Byrne CMT, MFTA – The Daily Gold – May 19, 2022
“There is a template that most bear markets follow. Assuming the S&P follows this template, it will have a specific impact for Gold.”
https://thedailygold.com/video-path-of-bear-market-in-stocks-how-it-impacts-gold/