TheDailyGold: They Don't Ring a Bell at Bottoms....

Published: Thu, 11/17/22

The Daily Gold
Jordan Roy-Byrne, CMT, MFTA


Thursday, November 17, 2022


Good Morning!

I just wrote this article hours ago.

Bottoms are known only well after the fact. 

Before a bottom happens sentiment is terrible but most misinterpret the technicals and the fundamentals.

Usually there are subtle signs from the technicals that the downtrend is ending. And the fundamentals are not far from turning bullish.  

We noted the positive divergences several weeks ago and fundamentally, precious metals are approaching a major turning point. Real interest rates tend to peak when the Fed ends its hikes. 

They Don't Ring a Bell at Bottoms


This chart highlights examples of the Fed pivoting (from rate hikes to rate cuts) and the market plunging.

When the economy is in a soft landing phase like in the mid 1980s, mid 1990s or 2018, rate cuts are an immediate catalyst. 

However, in most cases, the Fed pivot is a reaction to economic conditions worsening.

The Fed will cut rates next year whether the economy is headed for a soft landing or full blown recession. The latter is super bullish for precious metals. 


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We have seen a pop in the miner indices: GDX, GDXJ, SIL, etc, but junior have lagged.

We are seeing tax loss selling and capitulation in many individual juniors. A random big holder here and there could dump his stock and that keeps the stock price down rather than rallying with the sector.

This is temporary and so juniors will be in better position to rally in a month or so. That could coincide, roughly, with the Fed's last hike.

Elsewhere, you know how I love producers who value exploration? More on that in the next premium update....



Thanks for reading. I wish you all great health and prosperity.


Disclaimer: This newsletter is intended for informational and educational purposes only and should not be considered personalized and individualized investment advice. Investment in the precious metals sector contains significant risks. You should consult with an investment advisor and do your own due diligence before making any investment decisions. This email may contain certain forward looking statements which are subject to risks, uncertainties and a multitude of factors that can cause results and outcomes to differ materially from those discussed herein.  


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