From Collin Kettell: An interview with Jordan Roy-Byrne starts off by noting that the HUI chart is in a channel, with a breakout likely occurring at the end of it. Jordan agrees and says everything is indicative of a breakdown in the gold market in the next two to four weeks.
He feels the recent downtrend in the US dollar index should be a bullish sign for gold, despite this gold is way off of it’s recent highs. It’s bearish indicator since gold stocks have not confirmed the strength in gold or the US dollar weakness. If this had been ten years ago precious metals would be going crazy. This is not bull market action, precious metals normally tend to lead the dollar. Jordan discusses the GDX and the HUI and what he thinks are downward price targets.
The positive side of this is how gold and silver could be putting in a major double bottom for a very strong future bull market. While it’s hard to believe at the moment with sentiment being this negative. Jordan says don’t get too emotional about all this, raise some cash, hedge and get defensive, we are looking at incredible buying opportunities coming up over the next six to nine months.
Ultimately we need to see markets enter into a bear period and likely a recession. Lower interest rates and more government spending will then be highly inflationary. The long term fundamentals are bullish, while in the short term things are negative.
The SPDR Gold Trust ETF (NYSE:GLD) fell $0.05 (-0.04%) in premarket trading Friday. Year-to-date, GLD has gained 7.95%, versus a 7.97% rise in the benchmark S&P 500 index during the same period.
This article is brought to you courtesy of Palisade Research.