The Prospector News

Jordan Roy-Byrne – “Gold Secular Bull Depends on This”

You have opened a direct link to the current edition PDF

Open PDF Close
Uncategorized

Share this news article

Jordan Roy-Byrne – “Gold Secular Bull Depends on This”

 

 

 

 

 

I have written about this topic quite a few times. I am writing about it again today because it will become an extremely important indicator for precious metals within the next 12 months.

 

 

Gold has enjoyed a great rebound and has approached its 2020 and 2021 highs. But the stock market has also rebounded and has outperformed Gold strongly in the past few weeks.

 

 

The latest rebound in the stock market has removed it from the course of what I deem a mega-bear market. Nevertheless, economic data is slowly getting worse, and a recession and rate cuts are, eventually, likely.

 

 

In the meantime, to get a better picture of precious metals’ current standing, we should consult history.

 

 

The chart below plots the S&P 500 with our 60/40 expected returns data set, the CAPE ratio (10-year PE Ratio), and CPI Inflation. The yellow is the secular bear markets.

 

 

Today appears much like the mid-1960s. In both cases, expected returns were very low, valuations were historically extreme, and the inflation rate had just broken out after being dormant for many years.

 

 

Gold today could be where the gold stocks were in the early to mid-1960s.

 

 

In the chart below, we plot the S&P 500, the gold stocks against the S&P 500, the gold stocks, and at the bottom, Gold. The gold stock data is from the Barron’s Gold Mining Index.

 

 

In the 1960s, the gold stocks were the proxy for precious metals, as one could not own Gold.

 

 

The gold stocks made a multi-decade breakout in 1964, which was powered by the ratio (gold stocks against the S&P 500) breaking out from a 9-year-long base.

 

 

Gold today could be in a similar position.

 

 

For precious metals to embark on a real and secular bull market, Gold against the S&P 500 must break above its 2016 and 2020 highs, signified by the “2” in the chart below.

 

 

If the Gold to S&P 500 ratio can break above 1, Gold should move above $2100 and Silver to at least $30. However, breaking above 2 would confirm a new secular bull market in precious metals.

 

 

Last week we wrote that there were signs that precious metals would correct.

 

 

With the correction underway, keeping an eye on the stock market will be important. The stronger the stock market and the better the economic data, the longer the precious metals will correct.

 

 

If the stock market reverses lower before spring and economic data falters, precious metals will quickly sniff out the approaching rate cuts.

 

 

Even in a mild recession, the Fed will have to cut rates, and Gold should climb to at least $2400.

 

 

I continue to focus on finding high-quality juniors with 500% upside potential over the next few years. To learn the stocks we own and intend to buy, with at least 5x upside potential in the coming bull market, consider learning about our premium service.

Posted February 6, 2023

Share this news article

MORE or "UNCATEGORIZED"


Scorpio Gold Commences 2025 Drilling at the Manhattan District and Plans Initial Resource Estimate

Scorpio Gold Corporation (TSX-V: SGN) (OTCQB: SRCRF) (FSE: RY9) i... READ MORE

June 20, 2025

Goldshore Announces Closing of $36.08M Bought Deal Private Placement: Launch of 50,000m Drill Program and Updated Strategic Plan

On close of the Offering, Goldshore has over $40 million in cash ... READ MORE

June 20, 2025

Trident Resources Completes $2.25 Million Flow-Through Financing

Trident Resources Corp. (TSX-V: ROCK) (OTCQB: TRDTF) announces t... READ MORE

June 20, 2025

CUPANI METALS CLOSES 1ST TRANCHE OF FINANCING FOR PROCEEDS OF $2.9M

CUPANI METALS CORP.  (CSE: CUPA) (OTCQB: CUPIF) is pleased to an... READ MORE

June 20, 2025

METALLIS CLOSES $1,500,000 NON-BROKERED PRIVATE PLACEMENT

Metallis Resources Inc. (TSX-V: MTS); (OTCQB: MTLFF), (FSE: 0CVM... READ MORE

June 20, 2025

Copyright 2025 The Prospector News