Jordan Roy-Byrne, CMT, MFTA, Editor of The Daily Gold, joins us to for a wide-ranging discussion on the technical outlook in gold and silver, the ongoing divergence between the rally in the gold versus the US general equity markets and 60/40 portfolio, gold vs CPI, GDX versus US equities, and the value still to be found in precious metals equities for the longer-term, after this pullback is completed.
Key topics covered include:
Why technically we are seeing more of a bear flag developing in this recent gold pullback, versus a bull flag, and what may happen longer term after this corrective move.
Silver and gold stocks didn’t lead this move higher in the sector, but after this consolidation period, they will likely outperform the moves higher in gold on the next leg of this bull market.
What we could see a true golden age in both the gold and silver stocks over the next 18 months.
We’re in a market where you aren’t going to see big 20-30% corrections in the quality PM stocks, and why pullbacks of 15-17% should be bought.
The gold producer margins are so much higher that they simply won’t correct too much while they are generating such significant revenues and cash flows. Look for the quality gold producers generating profits and value.
Pullbacks will be more shallow because there is a large pool of capital on the sidelines waiting to get into position in the precious metals complex on any weakness, as more money rotates out of general equities.
There are some compelling opportunities in gold developers that will build a mine and go into production in the next 3 years. You get some of the best upside when a company goes from a construction decision into production.
There are also development projects with flaws that will not get built or will not be able to raise capital. These developers will become orphaned, and value traps, so investors need to be selective.
Jordan believes there is huge value in silver stocks right, maybe even more than in gold stocks, but he has specific thresholds he wants to see for the size of resources, average grade profile, and indications that it will become a mine.
When silver gets back above $35 and breaks out above $37, then money will pour into the silver stocks, starting to discount in advance the move to $50 in silver.
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