Latest / Financial Survival Network / Your Gold is Going Higher, Just Not Yet -- Jordan Roy-Byrne #5822

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Your Gold is Going Higher, Just Not Yet -- Jordan Roy-Byrne #5822 · Financial Survival Network

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  Gold breaks out above twenty one hundred, and you have a real bull market
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  that begins. You know, the measured upside target on that is three thousand,
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  the log target which Cup and Handles historically hit the log target based on
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  my research six months to twelve months after they hit the measured upside targets.
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  So that target is around four thousands for gold. So we get a real
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  breakout in this sector, then you're going to see these stocks absolutely fly and
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  blow the roof off. You're listening to Carrie Lets's Financial Survival Network where you
• 0:29
  get valuable information you just can't find anywhere else to thrive in today's trying times.
• 0:35
  You need the Financial Survival Network now more than ever. Go to Financial
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  Survival Network dot com and get your free newsletter in gift Financial Survival Network now
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  more than ever, And welcome. You are listening to the Financial Survival Network.
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  I'm your host, Carrie Lets. Well, we've seen gold price is
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  silver prices breakout. Gold traded at an all time high. Of course,
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  now it's pulled back and it's pulling back further. Today it's Thursday, May
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  twenty fifth, golds down according to Kiko fourteen plus dollars announced silver is down
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  another twenty eight cents to twenty two seventy five. What does it all mean?
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  Why have the medal been performing outperforming the stocks, especially the juniors,
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  by so much. Why do we keep getting these fake buy signals from the
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  miners? Well, Jordan roy Byrne and the Daily Goold dot com is with
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  us now, Jordan, great to have you back. What is going on?
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  Why do we keep getting these head fakes from gold Well? I think
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  to sum it up from gold, I think the real key is Gold is
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  setting up where the next big move. You know, there's really critical breakout
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  through twenty one hundred, which has not quite happened yet. I think that's
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  going to coincide with, or it has to coincide with another leg down on
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  the stock market where the FED eases or they have to eat, so the
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  economy has to move towards a recession, and so it forces the FED to
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  ease. I mean, we've already seen inflation statistics come down to I mean
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  I don't pay attention that closely, but I think the last reading was four
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  percent. It doesn't mean that the huge cost increases of the last couple of
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  years are going down. I mean obviously it's inflation is still a huge problem,
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  even if their statistics show three percent or whatever. But the point being
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  we go into a recession, then policy makers have that happens, then we
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  can already see it the worries about inflation, at least from you know,
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  I'm not saying it's it's going away completely, but the balance between recession and
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  inflation, if you're thinking about those two things, you know, at this
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  point they're probably i would say close to pretty even as far as worries.
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  Whereas six months ago, twelve months ago, it was one hundred percent inflation,
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  and so if the rate of inflation has been coming down now there's a
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  lot more concern learn about the economy, economic growth going into a recession.
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  So you have to get to that point with respect to gold where the FED
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  is forced to ease policy, and I think they will eventually. It's just
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  a question of you know, is it going to happen in one or two
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  months or six months, and that depends on the economy. So that that
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  to me is really and you know, I'm a technical analyst, but you
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  have to look at the technicals and then also look at the fundamentals and kind
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  of match them together. So I think recently for gold, and we had
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  these bank failures, you know, the FED balance sheet, they had to
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  increase their balance sheet again, you had that, I mean, you have
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  the debt ceiling, you know, fiasco that's coming up. Then you had
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  some thinking that while the Fed is you know, they're going to pivot immediately
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  because of these things. So I think a lot of money came into gold,
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  you know, some of it hot money, and so that wasn't quite
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  enough to make gold break out at least not yet in my opinion. So
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  I just coming back to it, it's really, you know, tell me
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  when the economy is going to go, you know, head towards a recession,
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  like when it becomes imminent, that's going to force the FED to ease,
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  and that's what's going to make gold finally break out above twenty one hundred.
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  All right, But arguably we're already in a recession and we have been
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  for a while. If you look at real growth rates only in nominal growth
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  rates, are we not in a recession? But that's okay with the Fed
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  and the policy makers. Well, I mean I don't disagree with you,
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  but when you look at I mean statistically yes, but when you look at
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  a lot of the indicators, and granted I'm not an economist, so I'll
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  try and dread lightly on this stuff. But you know, even though statistically
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  we're in a recession in twenty two, you know, the consumption, what
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  are the other indicators, the general industrial production, I mean those types.
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  If you look at those things, employment, they weren't they haven't been going
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  down. I mean some of them are going down, but they all haven't
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  been going down yet together like what you typically see in a recession. So
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  you know, the jobs market has only been starting to weaken. I think
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  in the last month or so, the Jolts data is starting to get pretty
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  bad jobs claims. I think we're the last reading or the second to last
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  reading. I think we're close to a two year high. So these,
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  you know, and now you have the tightness in the bank lending. So
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  as far as like a real recession, when economic activity is really declining or
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  rolling over badly, we're not quite there at that point. And another thing
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  is when you look at these yield curve in versions, the three months to
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  the ten year, that yield spread, which I mean, I'm not going
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  to say that's the best but it seems a lot of people are focused on
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  that one. I know the FET is more focused on that one. If
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  you look at all the historical inversions the median as far as the time historically
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  when the inversion is and the recession hits, that lines up to September as
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  far as the media. Now, if you look at I think four of
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  the last seven recessions or something like they're five of the last seven, and
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  you look at the inversion and then when the recession hit it was I think
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  like ten twelve, twelve, fourteen months, and even one with seventeen months,
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  like I think we had the the inversion I think during the financial crisis
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  was in two thousand and six. So in some of these cases there can
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  be like I think, we're only about seven months into the inversion of that
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  yield spread. So if you're looking at this data, you know, September
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  is one possibility of when the recession could start, and then like I said,
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  four of the seven or even you know, would tell you that it's
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  even going to come later than that. So I think, again I'm not
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  an economist, but looking at this data, you could see any time from
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  September to to you know, next winter, you know, be at November,
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  December, January, like that could be the point when you see recession
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  hit, where economic data really starts to roll over badly and everything is negative.
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  Like we haven't seen everything being negative of yet. It's not to say
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  the economy is good because I mean, if you look at statistics and the
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  last two or three months, you know, you look at those, I'm
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  gonna say they're political statistics, but you know, percentage of people who think,
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  you know, the economy is really hurting them or it's like bad.
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  Now, I've noticed in the last two months, like it's really started to
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  get like there's been a huge change in the last couple of months. So
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  I think we're getting closer to that point where we actually will get a recession.
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  And so I'm not disputing what you said at the beginning, but some
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  of the statistics, like employment hasn't really been that bad yet. You know,
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  bank lending hasn't really rolled over until the last couple of months. So
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  some data has held up okay until you know, very recently, but it's
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  slow moving. But I think we're going to get to that point maybe in
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  September, you know, maybe by the end of the year maybe that kind
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  of time frame. So I think that's what people have to understand. Obviously,
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  we live in a world where everything is like instantaneous and we have to
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  have everything every second. Economy is not good, you know, recession yield
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  current version. Okay, the recession is going to hit. But if again,
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  if we look at history in the media, time that tells us around
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  September. We look at some cases, that tells us you know, potentially
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  in the winter. So I just think that's you know, and and that
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  coincides with gold getting really close to breaking out. Now you know, it's
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  having this pullback. You know, it's probably gonna be deeper than you know,
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  we originally thought. But I think that's what explains gold's weakness is you
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  know, the recession is not imminent, however, it is coming, you
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  know, at some point this year, and there's nothing that can really stop
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  it at this point, is there No? And again I'm not an economist,
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  but if you look at all this data, like I said, the
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  employment picture is starting to worsen, and you know the bank lending with that's
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  only just started to roll over, so that's going to be a serious problem.
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  I mean, the commercial real estate, which is a time bomb.
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  Um, yes, I absolutely agree with you. Like it's it. There's
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  nothing that's coming, you know, at least not yet. I mean there's
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  no I mean, even if they cut rates like that's that would take you
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  know, six to nine months to even start to have a positive impact.
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  And I mean there's some fiscal I was reading there's some m you know,
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  I don't know if this is true, but like some you know, money
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  from the infrastructure package is like helping the economy you know, statistically avoid a
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  recession for now. But so there's no fiscal coming immediately. There's no you
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  know, rate cuts as far as the impositive impact of rate cuts like that's
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  not coming at least until next year. And so there's just there's nothing that's
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  going to reverse you know, this rolling over of the economy, you know,
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  especially when you know the now the the inflation rate is coming down,
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  but I don't think we're going to see that come down to like, you
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  know, two percent. You know, it's probably pretty close to pretty close
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  to its bottom. And that and that's you know, and that and that
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  I just think that's probably going to be the problem over the coming years is
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  you know, even if the recession is not that bad. Inflation, you
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  know, you cut rates and some you know, fiscal stemp morse, fiscal
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  stimulus gets done. Um, you know that gets pumped back into the economy,
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  you're going to see inflation run up again. So I mean, these
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  we're not we're not in a good situation economically, even though if you look
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  at you know, gold, it hasn't broken out yet. Um, I
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  wouldn't, I wouldn't be dissuaded, right, so gold will be the final
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  confirmation that we're looking for in other words, right, yeah, that that's
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  that's a really good point. Um. Now, typically you see the the
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  yield curve steep in, which means the short term rates, like if you're
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  looking at the three month or the two year, those will really like plunge
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  lower when the market is starting to discount a recession. And then the Fed
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  follows, they follow the two years. So when that really plugs, I
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  mean the Feds, you know, they're behind the two year you know,
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  by quite a lot, meaning the Fed funds rate is well above the two
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  year yield right now. But if you know, you see the two year
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  yield reverse and roll over and all this money starts rushing into bonds. I
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  think that that's the signal, um you know, that'll be at the same
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  time gold will strength and when that happens. But that that's a great point
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  that you made. That Yet you see gold breaking out above twenty one.
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  Yeah, yes, that that that'll be confirmation of a recession. Yeah yeah.
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  I mean the market always, somebody once told me a wise old trader,
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  the market always seeks to frustrate the majority of participants. And nowhere is
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  that more true than in precious metals and the mining stocks, especially the juniors.
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  Right, yeah, absolutely, I'm sure people are feeling very frustrated.
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  And to go back to your mean, to go back to what you said
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  at the beginning. You know, in the big picture, miners actually follow
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  you know, the people talk about the inflation adjusted gold price, and I
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  just every time I hear that, I would think, you know, while
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  I don't care about that, why is that meaningful? But I threw that
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  up on it. I was trying to think of, like, what's a
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  good indicator for the gold stocks because they don't really I mean, of course
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  they follow golds, but you know they're more correlated. I mean, is
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  there an indicator that can measure their profitability. You know, is a gold
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  against the CRB, is it gold against the stock markets. I'm looking at
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  these hundred year charts, and gold against the CPI actually lines up really well
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  with how the gold stocks have performed, you know, over a one hundred
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  year period. And it makes a lot of sense because gold typically outperforms right
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  before the inflation hits, and you know, same thing for the gold stocks.
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  And so I was looking at you know, gold against the CPI and
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  the Baron's gold mining indecks going back one hundred years, and they look I'm
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  not gonna say they look identical, but they look fairly similar. So that's
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  been the issue for gold. I mean, if you think about the gold
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  price, is where it was, you know, nearly three years ago,
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  also nearly you know, ten twelve years ago. I just think about ten
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  twelve years ago, the you know, the average mine. Okay, you
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  have the gold price, which is you know, nineteen hundred, two thousand,
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  whatever, and then you have the the all in costs of the average
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  mind, if let's just say it was a thousand back then, what do
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  you think that cost was three years ago? Probably higher, you know by
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  a good amount. Now even if we're just looking today versus three years ago,
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  I mean, the cost of mining gold has gone up a lot.
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  I mean, if you had a mind, if you're you look at these
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  studies, if you had a project where you're all in cost three years ago
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  was like a thousand dollars announced, that's probably like thirteen fifty now. I'm
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  just guessing. You know, it might be twelve hundred for some minds,
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  it might be fourteen hundred for others. And then you have the problem where
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  the you know, the top line, the gold price hasn't moved, so
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  you know you're you're the average producer, your margin is so much less.
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  And it's the same thing for the juniors. You know, whether whether they're
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  a small producer or if they're an explorer developer, the average margin on their
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  project potentially is so much less now than it was three years ago. And
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  at the same time, you know, if these companies are not making money,
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  that's three years where they have to dilute themselves to raise money. So
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  that's why you know you're in this. You call it a cyclical bearer market
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  for the stocks in the last you know, nearly three years, the margins
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  are even for you know, just an explore developer, the potential margins on
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  their projects are so much worse. And then at the same time that's three
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  years of having to raise equity. So I mean that's you know, the
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  the average the margin on their deposit or exploration project potentially you know, maybe
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  it's down thirty or forty percent. And then at the same time how much
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  delution. I mean, if a company had one hundred million shares, maybe
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  they have one hundred and eighty million now. So that's why these some of
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  these stocks are down seventy eighty percent. I mean, you know, granted,
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  some of them do add value, so it's everything is not you know,
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  they it's it's not like all of them have added zero value. But
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  even if you add some value, you have to weight that against the dilution
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  and the share structure and the potential margins on the project. So that's what
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  they're going through. Now. The upside of that is gold breaks out above
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  twenty one hundred and you have a real bull market that begins. You know,
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  the measured upside target on that is three thousand, the log target,
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  which Cup and Handles historically hit the log target. Based on my research six
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  months to twelve months after they hit the measured upside targets. So that target
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  is around four thousands for goals. So we get a real breakout in this
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  sector, then you're going to see these stocks absolutely fly and blow the roof
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  off because you're you're going to get this vertical move in the price of gold.
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  And then even if costs are going up a little bit, you know,
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  the potential margins maybe if you're you know, let's say you're developer and
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  the potential margin is five hundred dollars announced, well, you know, you
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  get this huge move in gold, maybe it becomes seventeen hundred dollars announced,
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  you know, after two or three years. So that's the that's the flip
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  side, and that's why, giving the macro picture and the cost pressures we've
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  seen in the last couple of years, that's why gold has to break above
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  twenty one hundred for there to be a real bull market in this space,
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  right, Okay, So so basically patients will be there shortly. Yes,
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  I would agree with that, and it really sucks to say. I'm frustrated
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  that I have to say that, because I did think that. I mean,
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  in the last month or two you had I think you had two monthly
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  closes that were monthly all time high closes. You had a quarterly close it
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  was a new quarterly all time even on a weekly basis, like five five
• 16:57
  of the six closes were like the second through the six highest closes ever.
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  So we were like a hair away from breaking out where if gold could have
• 17:06
  closed above twenty fifty or twenty sixty on a daily basis, you would have
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  seen you know, I'm not saying it would have gone to three thousand off
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  that, but you know, maybe it goes above twenty one hundred and it
• 17:15
  gets to twenty two hundred before it pulls back a little bit. But yeah,
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  we were so close and just to see it have this failure, and
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  you know, looking at the technicals now, you know, I don't see
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  gold breaking out of the next couple months. I think it's going to take
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  longer. And it's I mean, I under I'm really frustrating. I understand
• 17:33
  people are probably really frustrated, and they don't probably don't want to hear that
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  about having to wait. I mean, you know, I'm you know,
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  about to go to the Metals investor form I give a presentation. I'm just
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  thinking you know, I got to say something different. I don't want to.
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  You know, well, well we're short term barrass long term bullish.
• 17:48
  I mean, I get tired of having to say that. But it's it's
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  frustrating. I mean, that's where we are. But it comes down to
• 17:56
  the recession and you know that that that will pressure the stock market, and
• 18:00
  that will force the Fed to have to ease at some point. And you
• 18:03
  know, you also got the twenty four elections. So if you have the
• 18:07
  economy rolling over, you know before next year, even if it happens in
• 18:11
  the winter, you know, all politicians will be wanting you know, rake
• 18:17
  cuts and you know, fiscal at the same time. So that's again it
• 18:22
  just it for gold, it you just it's not complicated right now. It
• 18:26
  all comes back to the economy because if the economy of voids recession and you
• 18:30
  have some soft landing in the FED, you know, let's say they cut
• 18:33
  rates. You know, in that scenario, I think gold would probably break
• 18:37
  out and still rise, but you probably you know, maybe it runs to
• 18:40
  twenty three or twenty four hundred and then it just you know, rolls over
• 18:44
  again. It's dead for another year or two or whatever. But that so
• 18:48
  that would be the soft landing scenario, which I I mean, I I
• 18:52
  think the odds of that are just extremely low. But you know, I'm
• 18:56
  just mentioning that so I don't sound like a complete, you know, Gold
• 19:00
  cheerleader here. I think it's more a question of the timing when the recession
• 19:04
  is going to hit, and whether it you know, it'll hit like it
• 19:07
  this summer or if it's gonna you know, be in the fall or in
• 19:11
  the winter. I think that's the real question, I mean, right now
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  for me at least. All right, Well, I think you've summed up
• 19:18
  the conundrum very well. As far as we go, we're holding our positions.
• 19:23
  But hey, a lot of you out there have sold and you might
• 19:27
  one day live to regret that. But maybe you won't. I don't know
• 19:33
  the answer to it, but Jordan, just tell us your publication. You're
• 19:37
  tracking all this closely. Why should you subscribe? Yes? Well, I
• 19:41
  post everything at the Daily Gold dot com. The Daily Gold premium is my
• 19:45
  publication. I'm publishing lots of free videos and I write lots of free things.
• 19:52
  So you can go to the website, you know, get on my
• 19:53
  email list, and if you look at all the content that I put out
• 19:56
  and if you like that, then you can consider driving. It's the Daily
• 20:00
  Gold Premium. I mean, there's I think a link in the top right
• 20:03
  of my website, but the Dailygold dot com. You can get everything there.
• 20:07
  I also I'm publishing lots of stuff on my YouTube channel if you like
• 20:11
  videos. So there's a lot of free stuff to check out. And I
• 20:14
  would would love for anybody to subscribe, but you know, I would say
• 20:18
  look at the content first, you know, spend a little time educating yourself,
• 20:21
  and you know that might give you a better idea if my work is
• 20:25
  right for you. All right, Hey, we really appreciate you coming on.
• 20:27
  If you've got a question for Jordan, and I'm sure you've got some,
• 20:30
  shoot me an email kl at Kerreluts dot com. We'll get you at
• 20:33
  answer quick and you'll find a link to The Daily Gold in the show notes
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  to this interview on Financial Survival Network dot com. Click it and it'll take
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  free newsletter. We have the summary of all the important news podcasts that have
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  been done recently. Interviews with the people you're concerned about. Jordan A pleasure.
• 20:56
  Thanks so much for coming on again. Hey Kerry, so much for
• 21:00
  having me on. I always love doing your interviews. That's my pleasure.
• 21:03
  Thanks for listening to carry Lets's Financial Survival Network, your solution to today's trying
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