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