Jordan Roy-Byrne: Expect a Rip-Roaring Bull Market in Gold & Silver
Jordan discusses the S&P selling off and being the most oversold since 2008. When you get an accelerated sell-off, you get funds busting and lots of margin calls. This starts impacting on gold and other liquid assets like silver. Inevitably this is all bullish for gold and silver once this phase passes.
GDX and GDX.J have been weaker than gold, and this often signals a possible gold sell-off. The recent sell-off that we have seen in the mining stocks is historic and without precedent. Mining stocks right now are a once in a lifetime event as the stage is set for a considerable recovery. This pandemic will have a severe impact on the economy, and we are already witnessing a global recession.
Falling interest rates strengthen gold, and rising expectations of inflation will cause silver to do even better in an inflationary environment. The gold-silver ratio has been extreme for a while; however, Jordan feels the ratio isn’t as important as the overall trend. Investors should focus on inflation expectations as that will reveal when silver will outperform.
The gold stocks vs. S&P ratio is crucial since, commonly, a bull market in gold occurs when gold outperforms the S&P, which then attracts investors.
He expects a rip-roaring bull market in the not too distant future that will last for several years. His view is that gold will outperform for the next twenty years and recommends that investors dollar cost average into gold and silver to take advantage of this trend.
Time Stamp References:
0:40 – Historic activity in the markets.
3:10 – Leading indicators for weakness.
5:30 – Global recession and outlook.
6:30 – Lows for GDX and GDX.J
8:30 – Valuations in the mining industry.
10:40 – Market analysis methods.
13:45 – Gold Silver ratio follow the trend.
15:45 – Gold vs. the S&P ratio.
19:50 – Advantages/disadvantages of warrants.
22:40 – Retail floats with stocks.
Talking Points From This Week’s Episode
• S&P sell-off, margin calls, and investor liquidity.
• The mining sector is at unprecedented historic lows.
• To attract investors, gold needs to outperform the S&P.
• His expectations for a lengthy rip-roaring bull market cycle.
Jordan Roy-Byrne, CMT, MFTA is the editor and publisher of TheDailyGold.com and TheDailyGold Premium, a premium publication that emphasizes market timing and stock selection for precious metals investors. He is a Chartered Market Technician and Master of Financial Technical Analysis. His Masters Thesis, which earned him the MFTA designation, was published in the International Federation of Technical Analysis Journal. Currently, no other technical analyst covering precious metals possesses the MFTA designation.
He earned a degree in General Studies from the University of Washington with a concentration in Internal Economic Development. He is also the author of several books, including “The Coming New Bull Market in Gold,” which is available for free on his website.