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Jonathan Mergott: Gold Moves When Miners Can’t Make Money, Like Now

Tom welcomes back Jonathan Mergott to the show. Jonathan is a Precious Metals Analyst and President of both Alchemy Financial and the Meta C. Mergott Foundation. He discusses the state of the metal markets, particularly silver and gold miners. Bearish sentiment remains in the market, with Comex inventories aligning with this sentiment and the Bulls dropping to 8% on DSI. The Fed’s forward path was identified as a potential influence on gold prices.

Jonathan noted that the market is showing evidence of a bear market rather than a bullish consolidation, with changing sentiment serving as proof. He observed that gold and silver are often sought after during times of economic weakness and increased volatility, as they provide protection against counterparty risk. However, he believed that silver, in particular, has the potential to catch up in price and be recognized as a monetary metal for the people.

Regarding investing strategies, Jonathan suggests playing gold and silver against each other can be beneficial for those willing to take on a percentage risk. He acknowledged that investing in junior miners can be lucrative but carries a high risk of loss. On the other hand, low-risk investments such as index funds, bullion, and royalty companies may provide more consistent long-term returns.

Jonathan further emphasized the importance of finding the right balance in portfolio allocations based on individual risk tolerance. A mix of low and high-risk investments was recommended. It was noted that risk tolerance may vary between individuals, and investment decisions should be based on personal circumstances and comfort levels.

In terms of timing investments in junior miners, Jonathan advised observing pullbacks and rallies in the sector. If the miners are not collapsing and the 200-day moving averages are rising, it may be a good time for investment. He stresses the importance of being in a financially secure position before taking such risks.

Time Stamp References:
0:00 – Introduction
0:52 – What Has Changed
4:39 – Fed & The Path Forward
8:57 – Recent Gold Action
14:49 – Equity Mkts. & Risks
17:57 – Big Entities & Volatility
23:38 – Gold To Silver Ratio
25:58 – Perspective & Sentiment
32:04 – Indifferent Markets?
35:03 – Gold in a Good Setup?
38:58 – Leverage Cuts Both Ways
41:33 – Portfolio Balance & Risk
53:14 – Risk Tolerances
55:35 – What is Needed
1:01:18 – Wrap Up

Talking Points From This Episode

  • The bearish sentiment in the metal markets, particularly for silver and gold miners remains.
  • Factors other than the Fed such as inflation, debt, and general loss of confidence may be driving the recent rally.
  • Balancing investments in a mix of low and high-risk assets, with a focus on individual risk tolerance. He is cautious with mining equities because most are leveraged instruments.

Guest Links:

Jonathan Mergott is Precious Metals Analyst, President and Portfolio Manager of Meta C. Mergott Foundation. Jonathan lives in the New York/New Jersey area with 11 years of experience in the market and stock analysis, risk management, investment management, investor relations, and financial analysis.

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