SILVER Set For '2nd Biggest Breakout in HISTORY' – 4 Digits Will Happen: Jordan Roy-Byrne
Summary
Precious Metals Bull Market: Jordan Roy-Byrne discusses the beginning of a new secular bull market in gold and silver, drawing parallels to the economic conditions of the 1960s and 1970s.
Silver Breakout: He predicts that silver is set for the second biggest breakout in history, with potential to reach triple-digit prices, driven by a long-term bullish technical setup.
Bond Market Dynamics: The current secular bear market in bonds is highlighted as a significant factor, contrasting with historical periods where secular bull markets in bonds provided alternatives to stock investments.
Gold and Silver Miners: The mining sector is identified as being in a "sweet spot" for outperformance, with gold and silver stocks expected to benefit from rising real prices of the metals.
Investment Strategy: Emphasis is placed on the importance of selecting the right companies within the mining sector, focusing on junior producers and developers for potential high returns.
Market Indicators: Key indicators for monitoring the end of the bull market include the gold price relative to the 60/40 portfolio and the inflation-adjusted price of gold.
Long-term Outlook: The bull market in precious metals is expected to last until the mid-2030s, with significant price targets for gold and silver based on historical patterns and technical analysis.
Transcript
Hello everybody and welcome into commodity culture where our goal is to make you a better investor in the commodities sector. My name is Jesse Day and on this episode I'm thrilled to welcome Jordan Roy Burn to the show, precious metals analyst, publisher of the daily gold newsletter and author of Gold and Silver, the greatest bull market has begun. We're going to dive into why Jordan believes we are at the very start of an epic bull cycle in both gold and silver that could last a decade or more. How high could both metals go? And what are the signs to look for that it's time to take profits? We're going to unpack why Jordan thinks the coming breakout in silver will be the second biggest breakout of any asset in history along with unpacking his approach to the precious metals mining sector and why he sees tremendous value in the miners ahead. All of this and so much more ahead in my conversation with Jordan Roy Burn. Jordan Roy Burn, great to have you on Commodity Culture. I want to kick things off with a very interesting thread you posted on X recently titled, "No 2008 replay for gold or gold stocks is coming anytime soon." Walk us through your thesis here and why you think our economic and market environment today is more similar to the 60s and the 70s than to 2008. >> Okay, there's a lot to unpack there. uh I'll do the best that I can because there's so many things uh that are giving me a strong argument for this and and we're fighting against recency bias here because everyone was shell shocked by 2008 especially in precious metals in juniors in hard assets. So because of that and also you had a mini replay of that in 2020. So everyone has a very heavy recency bias of this and Jesse people were talking about this a year or two years ago. people were talking about, oh, we're going to see a big crash. This was in 2023 when uh gold was consolidating for three and a half years in the handle part of the the cup and handle pattern. Uh you know, the miners were still down a so it was just so ridiculous to me that it just when again when people were talking about this a couple years ago, it really served to to show you how heavy uh the recency bias that people have is at this point. But the very big picture in markets is we're in a we're very similar to the mid to late 1960s and the reason for that the biggest reason is if you look at the bond market a secular bare market in bonds began in the last couple years. We all know that now one also began depending on how you measure it the mid to late 1960s in that area but for me it was really in 1965. And when you have a secular bear beginning in bonds, what happens or what has happened in these two instances is after that happened, capital at the beginning basically started moving into bonds or excuse me started moving into stocks continued to move into stocks but then gold at the same time. Now gold was fixed in the in the mid60 or until 1971. So gold stocks were really the proxy uh for gold. And so you go back to 1964, gold stocks broke out of a 37-year long base, a spectacular breakout uh that led to, you know, fantastic performance really from 1960 to 1980. But I liken what happened in the gold stocks in the mid60s, very similar to gold's recent breakout uh last year uh in March of 2024. It broke out of this super bullish 13-year cup and handle pattern. the second biggest breakout in gold's history. The first being gold's breakout in 1972 uh which was actually a 100year breakout. You got to go back to the civil war. Uh if you look at that much data, you can see how significant that breakout was. So recently we have the second biggest breakout in gold's history uh with respect to gold. So if we're looking at what h what's happening in precious metals and the bond market very similar to the mid60s and at the same time if you look at the stock market if you look right now the stock market is still in a secular bull and my demarcation line for that is the 40-month moving average. So in the last 3 four years there's been a couple times where the market's come down but it's successfully tested the 40month moving average and continued to rise. And so like it was until the end of 1968, it's still in a secular bull market. So that mid 1960s period where you had stocks going up and precious metals going up at the same time. Very rare. There was some overlap there. Uh but so so because of that and because of the bond market there there's just really strong similarities. And in the mid60s you started you had a breakout at in inflation. So you did see from 65 to 68 you saw inflation rising. although it really didn't get terrible until the 1970s. So based on that, uh we're very similar to the mid to late 1960s. Uh but circling back to 2008, one thing if you look at precious metals bull markets, there was that big decline in the middle of it. So you had 2008 in all precious metals, you had the same thing in 75 to 76. So, if we're looking at a secular bull market that just began in precious metals and if we look at the last two um you know then we'd think okay well there's going to be two really strong legs and maybe in the middle you get that nasty bare market but we just broke out of the cup and handle pattern and there there's lots of other reasons like if you look at various other charts and I don't want to bore you by going through them all but if you look at those charts at least the gold price in real terms like if you're looking at gold against the monitor ary base gold against the stock market. If you look at um you know the ETF flows um if you look at um I think I already said gold divided by the stock market but like if you look at for example if you look at the ETF flows and the percentage of capital that's in gold uh it's like or in gold ETFs it's like less than 2% right now in 2008 that was 8%. So that's another example. So, if you look at all these things and then you look at the breakout from the 13-year long cup and handle pattern a year ago, all those things tell you we're in a new secular bull market for gold. Like, this didn't begin in 2016 like some people think. Like, this really began a year ago. And so, you you put those things together, you consider the history. Well, there's a big bare market in the middle. We're nowhere close to that middle point yet. And in addition to that, I already mentioned the bond market. 2008 we didn't we were in a secular bull market in bonds in the mid 1960s we were not we were in a secular bare market and if you look at the history of the bond market Jesse from 1920 to 2020 that's a 100red years the only time you lost money in bonds was 1965 to 1982 so people are very unaccustomed to a secular bare market in bonds like our our historical frame of reference is only the mid to late60s uh and then the 70s until 1982. And so what happens when you have a secular bare market at bonds is you don't get crashes in the stock market. Like if you look at that period 65 to 82, the worst bare market was 74 to 75, a 48% bare market. But what happened typically in a bare market, you have three parts, but the crash comes in the middle. You have the first part where people don't even know you're in a bear. Then you get the recognition move, you know, the crash or the accelerated downside move. Then people are like, "Holy you know, we know this is a a bad bare market." And then after that's over, you might have a little bit more of a leg down before it ends. But the two worst bare markets in that 65 to 82 period, 68 to 70 and then 74 to 75, the worst part was actually at the very end. So that 48% bare market in the mid70s. If if you look like 18 months into it, the market was down 23%. So it was a bare market, but it wasn't really considered a really bad market until the last three or four months when the bottom fell out. So that's very unusual. But but but again stepping back, if you look at all the the famous crashes in the stock market, 29, 37, you know, 87, 2000, 2007, all those periods, you had a secular bull in bonds. Why is that important? Because when you have a secular bull in bonds, there is a easy alternative for mom and pop and retail investors. They say, "Okay, I'll just go into bonds. I can get my 4%." You or even, you know, hedge funds or, you know, uh, uh, pension funds and the like, those organizations, you know, if there if there's a secular bull in bonds, they can always sell their stocks, go into bonds, and get their three or 4%. But we know that you can't do that anymore because there's a secular bear in bonds. Now, sure, we might get a downturn at some point. But we'll get a bounce of bonds but the major trend is down. And so this is really rare. Again, we haven't seen this through the mid since the mid1 1960s. So that's why in that period if you look at actually 62 to 82, you have more frequent bare markets, but you don't have crashes. So that's different than 29 to 37, 2000 to 2011. We had the two big uh bare markets in those secular bare market periods. But again 65 to 82 or 62 to 82 you had something like 8% bare mark eight bare markets uh eight declines of 20% or more like you could get 62 there was one 66 then you had 68 to 70 then you had you know the one in the middle then you had 1978 so you had and then you had you know 80 and 82 so during that entire period you had frequent bare markets but really no crashes and if you go back to 2018 we've had you know a handful almost of 20% declines but no crashes. So, uh yeah, there's just numerous reasons here pointing to that. And then the most important reason and I hope I can explain this because it's a little difficult to explain, but I have this indicator that I constructed which is gold against the 60/40 portfolio. So, gold against 60% stocks, 40% bonds. And so when gold is in a precious or when gold or precious metals are in a secular bull market, capital is moving away from stocks and bonds and into gold. And if you look at this indicator uh it broke out uh of a base in the early 1970s, 1972, it broke out and then it shot higher. Now the same thing happened in 2002 where it broke a downtrend. It moved above the long-term moving averages. And so th those points signaled really confirmed, okay, we're starting a new bull market in precious metals. Now earlier this year in March, that ratio broke out of a 10-year long base. And so the last two times that broke out, again, beginning of 72 and I think the beginning of 2002, you were around the point where there was a negative or inverse correlation between precious metals and the stock market. And so when capital rotates away from stocks and goes into hard assets and gold, you know, as evidenced by gold against the stock market or gold against my 6040 portfolio, there has there has to be a point where one is going up and the other is going down. Like it doesn't with respect to gold, it doesn't really happen where okay, well, gold's just going to start running a lot more than the stock market. I I know that that's kind of happened in the last couple years and we go back to the mid60s and you know if you look at gold stocks against the 6040 that broke out in ' 65 but with respect to gold itself when capital is rotating from one asset class to another with and again we're looking at you know we have stocks and bonds and then gold which is the granddaddy of all hard assets. So when capital is moving out of stocks and into gold that signals the start of a real bull market in gold. But there has to be a inverse correlation between the two where okay stocks are rolling over they're going down and that people are selling that money and then that money uh is going into gold. And so that's how you get uh an inverse correlation and it has to happen at the beginning of a new secular bull market in gold. can't happen in the middle or the end. So what happens at the beginning because at the beginning of a new secular bull in gold you people are still in stocks like you don't have a lot of money that's in gold. We know that central banks have been big investors but if you look at the retail audience and ETF flows and you've had other guests talk about this there's very little money even though we've done very well the last year or two there's still very little money in the sector. And so that's what happened in the early 70s and early 2000s. was very very little money in the sector when you had that downturn in the stock market. 2008, remember we were seven years into or six plus years into a period of when gold was outperforming the 6040 portfolio here and now like we're only a couple months into that. So there's not with respect to and again you go back to 2008 there was at that time there may have been more money in gold and gold stocks than actual you know regular conventional stocks because again you had six plus years where gold was already outperforming the 60/40 portfolio. So there was way more money in gold and precious metals at that time compared to the stock market. Now it's still, you know, it's still different because or completely different because again the stock market is still in a secular bowl. So what's going to happen? I'm not saying it's going to happen in the next month, but I think at some point, you know, could be in the next couple months, the next couple years, but that next downturn we have in the stock market, you're going to see precious metals decouple and uh, you know, outperform during that secular uh bear in the stock market or during the cyclical bear that begins the secular bear as happened in the early 2000s uh in the early uh early 1970s. So, I know that was a really long answer. appreciate you giving me the time to lay it all out, but yeah, it it's very technical, but it revolves around, you know, what's the very big picture? What's the macro market picture? What are capital flows doing right now? And again, the most important part is there's very little money in precious metals. And when the stock market rolls over and goes into a secular bear, as it did in the early 70s, early 2000s, that capital has to go somewhere. And by the way, uh you look at the 1970s, early 2000s, you still had a secular bull and bonds. In the 1970s, the the uh inverse correlation between gold and stocks was even stronger. And that's because of the secular bear and bonds. So when the stock market rolls over, yeah, some money might go into bonds naturally, but some of that money is going to go into gold, you know, because bonds are an iffy proposition. So again, I know I know it's it's a lot to take in, but I'm very confident in this and it's really important for people to understand this because, you know, it's easy just to default to recency bias to just assume there's going to be this big 2008 replay. It's not going to happen. But I will say, like we talked about at the beginning, there is a point in the middle of secular bulls and precious metals when you do get that nasty bare market. So, I don't know, maybe that's 2030 or 2029 or the end of 2028, but we're we're so far from that point right now. >> And now, a quick break to hear from our sponsor. Ark Silver Gold Osmium owner. Ian Everard is considered one of the most honest and levelheaded gold and silver dealers in the United States. Praised even by his competitors. So, give him a call today to take advantage of the specials right now. Silver kangaroos 2023 1oz coins mint fresh only $247 over spot. Mint fresh silver maple leaves 2025 coins 1 oz $2.87 over spot while supplies last. Reach out today at 3072649441 or by email at ianarchsggo.com and make sure to tell him that commodity culture sent you. And now back to the interview. Very well explained. And don't worry about take all the time you need to explain these concepts because as you said, it's very important that people grasp them. What I want to know is what are the indicators that you'll be watching for to know that we're reaching the end of this secular bull market in gold. Now, you said that we're close to the beginning at this point. That obviously means you see a lot more upside potential ahead in the gold price. So, I guess two questions. How long do you think this bull market could continue for? And what are the indicators you'll be watching for to note that okay, maybe now it's time to get out of this trade where it it's starting to reverse course. >> Yeah, for the overall secular trend, I think we're at least going to the mid 2030s, you know, maybe a little bit longer than that. Um, you know, if you look at, okay, when if you look at when the stock market began its secular bear, you go all the way back to 29. But when that happened, 1929. When did the gold stocks in the 30s when did their huge move stop? 1937. That was 8 years after the peak in stocks. You go back to the 60s and 70s, very end of ' 68, stock market rolled over, new secular bear. So that was 11 plus years when you had the 1980 peak in precious metals. You go back to the 2000s and so it was the uh it was two 2000 was the peak in that secular bull and so then precious metals peaked 11 years after that. So that's another way of looking at it. If you look at the the last two were 11 years. So you know may maybe if it's 2026 or or you know we could use 2026 but if that's the end of the secular poll and if we're looking at that history it'd be 2037. I am confident we are going to see it last uh at least until the mid30s or really close to that point because what'll happen we're at the beginning now and and you know this run now maybe it'll continue like I said to 2029 or 2030 and then you have a bare market for a year or two and then you know you could throw another three or four years on top of that but but yeah my for for here and now my focus is really on the next few years because we're in a cyclical bull and that's really you know when when that uh a bare market crash in the middle when that comes about. Uh I mean that that's like a bear a bearish concern that I have, but again that's several years away. Uh so I'm more I'm you know more keen on that. But as far as the big picture, another thing to keep in mind is I'm not a big cycles guy because they're really subjective. I mean they're really backwardlooking. They're not predictive. But there there's a there's one cycle that's really interesting and that is you have a major peak in inflation every 60 years. You have a peak every 30 years. And you could go back, okay, every 60 years. The 1860s, the Civil War, that was a major peak. 1920 was a major peak. 1980 was a major peak. So that takes us to 2040. If you look at every 30 years, 1920, 1951 was a big commodity inflation peak. 1980 was another one. 2011. So both of those line up for 2040 and every 60 years you have a major inflation peak. So for the overall uh commodity trade as a whole that's something that could last like another 13 14 15 years just based on the history. And again I'm not a I'm not a cycles guy but it's really interesting how you do get this inflation peak every 30 years and major peak every 60 years. But with respect to gold, Jesse, it's harder because we don't know. I mean, if if things get so out of control and, you know, maybe we go back on the gold standard in 2036 or something, you know, that could be the end of the gold secular bull, but you might have, you know, silver could last a couple more years or copper, oil could last a couple couple more years. So, um, yeah, as far as when it could hit, that's where you talked about indicators. I think time is just going to be a big one. Really, time. I mean, I could I could give a bunch of other answers. Well, we could look at, you know, gold against the 6040 doing a moonshot or gold and silver going parabolic. Um, but it it it's really time. I mean, it it's going to take time to play it. And I and I again, I don't think that this run in the next couple years, I don't think that's the end of it. You know, I think that's just the first phase. And then again, like I said, you get a cyclical bear around 2029 or 2030, you know, and then you have one more move after that. >> Let's pivot to the silver sector for a moment here. And I'd love you to separate some fact from fiction for us because it's obvious you have a very practical, level-headed approach, and silver is a topic that gets very hyperbolic. All sorts of prices get thrown out. I had Lynette Sang on the show last week. She said, "Silver's true value should be at least $1,300." That's about the highest I've ever heard anybody mention, but it's very regular for guests on the show to say triple digits are a certainty. You hear $500. Obviously, $50 silver is that big target. Um, what are your thoughts on the trajectory of the silver market? Because obviously to get back to 1980 all-time highs adjusted for inflation, we would need to be close to $200 today. Is tripledigit silver a realistic proposition in your view? And what are your overall thoughts on the silver sector? Yes, if you're giving me an open window as far as time, then I would say yes, silver is going to hit all those targets. And this is based on the the technical work that I do. And I'm looking at a 100red 200year charts. And what's really interesting, Jesse, is I mentioned the gold breakout in the early 70s. That was the biggest breakout of all time in capital markets history. You had gold tested this base at 45 or it was I think three times maybe. Yeah, about three times. So then in the early 70s it broke out of a 100redy year long base breakout of all time. I mean the m just think about that move like it went from 35 to 200 I think in three plus years and then you eventually it went to almost 900. Silver of course has this beautiful big bullish base. I you know I don't want to get into minutia but technically it's not a cup and handle because the handle part corrected way too much. Like if you look at gold's chart at a perfect cup and handle because the handle only retraced 38% of the gold price whereas silver its handle would have since 2011 it would have had to stay uh above 32 for it to be a proper cup and handle. So it's technically not a cup and handle. However, that aside, it still is in a super bullish base where you have this what are we at a 45 year long base. And so to me I'm I'm looking at everything. This will be the second biggest breakout of all time. It's not going to exceed what gold did in the early 70s, but still this is really exciting for silver. And if you look at other commodities, like I looked at when copper broke out in the mid 2000s, when oil broke out in the mid 2000s, and their bases were I I think uh like 30, you know, 30 years and 24 years respectively after they broke out. I mean, they they made some really big moves in a short amount of time. like copper really exploded and so looking at those breakouts and then thinking about what silver could do, which is another commodity, you know, I mean, I think it could probably go to 90 or 95 bucks after the breakout within 12 to 15 months. And I I I say that not to say everybody should line up and buy out of the money call options because it's going to happen. But I say that because we have to understand the setup like this is an extremely powerful setup that's going to give way to a spectacular breakout at some point. May maybe it's going to be next year. And I think that all those targets mentioned by all your guests, I think we're going to hit all those targets in, you know, in time eventually. You know, saying silver could go to a thousand, that doesn't help anybody make money right now in the next couple years. But if you look at gold against the monetary base and you look at gold against the stock market and you look at what levels were these ratios at when we had those peaks in 1980, you know, in 1934, 1942, you look at those levels um and where we are here and now, you know, that gold can get to 20,000 easy based on that history. And um you know if you look at again if you look at the major peaks in the gold silver ratio they're all under 20. So what does that tell you that yes silver can go to four digits which but it's really it's really for entertainment purposes because you you know no one's going to make money investing based on these targets that are not going to be hit probably until the next decade. Maybe not until the very end of the next decade. But again I like to focus on the the shorter term the next two or three years. But yes, silver does have that setup where I mean if it breaks 50, it's really gonna go crazy. So we're and you know we're getting pretty close to that point. Like silver in the last year or it's had to chew through a lot of resistance. 26 28 now it's it's finding less and less resistance. There's a little bit of resistance at 42 41 42. So we might stop there for a little bit. You know, we'll probably stop at 50 for at least a little while. But, you know, as a technical analyst, I mean, this is set up for the second biggest breakout of all time. So, it it's, you know, we're in the next couple years, like we really could be looking at $100 silver. Like, it it's I mean, all the targets that people have been talking about in recent years, you know, that have seemed ridiculous. We're getting closer to that point. I mean, especially $100 silver, we're getting much closer where this can actually be a reality in the next few years. >> Great analysis. this. And it should also be noted, silver did hit $40 at one point today, and as we speak right now is at $39.70. So, knocking on the door of that $40 level. Gold also at all-time highs as we speak. Very fascinating developments. I want to talk about gold revaluation for a moment because this is something a lot of my guests have spoken about. Before we hit record today, you said, "Yeah, you don't really pay too much attention to that. It's a little bit more noise than signal to you." Maybe you could walk us through your thoughts on the US revaluing its gold reserves. Do you think this is a realistic proposition? Would it have any far-reaching implications? And and why is it something that you don't really focus on? >> And admittedly, this these some of these areas are not my strong suit. I'm a markets guy. I'm a technical guy. So, I like looking at as much as I can technically and then also looking at data. So, I'm more of a you know facts, objective facts over the subjective. And so this is subjective. And if you look at the numbers, I I think to re I think for to revalue gold where it would really make a difference, like you might need to revalue it to $100,000. Like just revaluing it to 3500 or 4,000, there's so much debt that that's really that's really not going to do a lot. Like if you look at um the uh gold against the monetary base, like if if if you wanted to back 100% of the monetary base, the price is probably around 20,000 $23,000 an ounce right now. But then if you look at the how much gold we have and then the debt it's just you know if you again if you use like 4,000 or you know 35 you would need to put a zero on the end of it to even come close to making a difference with the debt. So this is not really going to improve our balance sheet that much. And and so with a lot of stuff we have to look at signal versus noise. And I remember Bob Morardi, you probably interviewed at some he talked about this, you know, like 10, I don't know, five, 10 years ago, and I always took that with me like what's signal, what's noise. And so in precious metals, especially on the analysis side, there's a lot of noise. And so, oh well, they're going to revalue gold, you know, what is that like? That's noise because we don't know if it's going to happen. Maybe it'll happen, you know, maybe it won't. And like I said, just looking at the numbers, this is not, you know, this is not that significant. Like I guess us gold bugs, we like to dream that there's going to be this sudden huge increase in the price, but I don't see I mean, even if they said gold was worth $10,000 an ounce. There would, if that happened, there would probably be a lot of selling. it would probably come down 50%, you know, in in the next couple days or couple and it would just totally mess up the structure of the market. So, and and I just think it's noise because we don't need that. Like just we're in a real bull market. It's going to last for another decade at least and we're going to see this fanatical prices that people have been predicting. they are going to get hit in time. And so we don't need the government to revalue gold or silver. It it it's just noise. Like it it doesn't matter. Like we're we're going to hit those targets and people are going to make a lot of money in this bull market without the government needing to get involved. >> Well said. I want to hone in on the gold and silver mining sector. Both areas of the market that have started to perform exceptionally well in the past few months. GDX, GDXJ, and SEL ETFs all up approximately 70% year to date. Obviously, vastly outperforming the broad market and the metals themselves. What is your thoughts currently on the precious metals uh miners? Is it is it similar to the metals themselves that you think we're in the beginning of a long-term bull cycle? Yes. I mean where we are here and now specifically we are in the real sweet spot when the stocks are going to outperform the metals. And one great indicator uh which can help you figure out if that's going to happen or not. I know people like to use the gold oil ratio but I discovered something when I was writing my book. If you look at the inflationadjusted price of gold, like if you look at that going back a hundred years, other than in the 1960s, which again was kind of a unique period, the chart of the Barren gold mining index or you could look at GDX or XAU like the the chart of that is very similar like the shape and the slope is very similar to gold against the inflation adjusted price. And I remember, you know, 20 or 10, 20 years ago hearing, oh, gold against the CPI, it's going up. And I thought, well, that doesn't mean anything. Who cares? Like, that doesn't mean anything. But then I discovered this and I realized, oh, this is really significant. You know what? Why are these two charts so similar? And again, we're looking at a hundred years, you know, not just like the last month or two. And the reason is gold stocks, they follow the margins, you know, the profitability of the mines, which can be described with cash flow. How much cash are these mines generating? And so a great indicator for that is gold minus cost. What are you going to use for cost? I know that some people use or gold divided by cost. I know some people use commodities, gold divided by commodities and and they use oil at the same time, you know, but I looked at that, but it didn't quite fit what was going on the stocks that well. And so then when I saw this in the CPI, it makes really good sense because the CPI is just it's inflation, but it's it's an indicator um of mining costs. And so again, the gold stocks and silver stocks as well, they're going to follow how the gold price is performing in real terms, how the silver price is performing in real terms because sure, the gold price can be up 50%. But what if costs are up 50%. You know, we saw this in 2020 and people have been saying that, you know, and just not to go on off on the side of diet tribe, but people are talking about, oh, well, you know, the the gold CEOs like, oh, these companies are terribly banished. But if you look at in 2020, you know, or or 2022, you know, gold was at or even 2023, gold was at the same level it was in 2011. Like you had 12, 13 years where gold is at the same price. How much how much have costs gone up since then? Like massively. And so this this happened again from 2020 to to 2024 where you had you know gold was going sideways, gold was near 2000. It rebounded but the stocks weren't doing anything. That's because the costs were up so damn much. You know this wasn't bad management. It it you know I remember tweeting about this you know a couple years ago. Have you seen any tweets recently about people saying the gold miners like they're managed poorly? I've heard a lot of a lot of guests have have brought that up particularly in regards to the last gold mining bull cycle and of course I have heard feedback to to that effect um to some people I've spoken with as well >> right but at least on my feed like compared to like two years ago or three years ago it was people would comment about gold oh terrible management they're poorly man but they would never point out that look the gold price I mean the real gold price gold divided by the CPI was down like 20 or 25%. You know, when your costs are going up and then the the the gold price which you sell had not broken out yet, that's a really hard business to manage. But now it's it's you know the complete opposite because because by the way if you look at gold against the CPI that earlier this year broke out of a 45 year long base. So you know we are in a real sweet spot for the miners right now. And it's the same thing like if you look at silver divided by the CPI and you would just put SIL underneath and you look at the last 15 years, it's almost identical to how they've moved. So again, gold and silver stocks, they move based on the real price because the real price where you could look at gold against the CPI or silver against the CPI, that is a strong indicator for margins or the profitability of these mines. And so we are in a real sweet spot right now where gold already broke out. You know, it has no resistance. It's a new all-time high territory. And so it's been crushing it. And you know, I'm sure the costs are up two, three, 5% a month or not a month, you know, per year. Uh but again, gold is just crushing it. So the real price is going like that. And we're going to see the same thing in silver when it breaks 50, you know, because like I said, silver could jump to 100 in 12 to 15 or 18 months after it makes that breakout. And so then the profitability of silver mines and silver production is going to go through the roof even if you have you know even if cost inflation is going up 15% or 10% or 18% a year at that point. So we are in a real sweet spot now but at some point and who knows maybe it'll be two three years when you get into a a situation where okay cost inflation is really starting to ramp up but then metals prices slow down. that's when the stocks won't do as well. So, at at some point that'll happen. But, you know, at least for right now and probably at least for the next 12 to 18 months, we are in a real sweet spot for the miners where the real price of gold and silver, they're going to keep moving higher. They're going to keep outperforming uh rising costs and and cost pressures. >> And where are you looking right now within the mining sector for value? Is there still um opportunity to be had in the bigger names, your barracks, your new Agniko Eagles, the royalty streamers, the ETFs? Um are you looking downstream at the the developers, explorers, all of the above? What what is your approach currently to the uh gold and silver mining space? Well, in my newsletter, I focus mostly on junior producers, uh, junior developers, companies that are building mines because that's when you get the best rerating when you build a mine or you're you're growing productions. That's when you have predictable outperformance. But as we know, a lot of those have moved a great deal. So, I am still finding some of those that are turnaround stories for, you know, for various reasons. I I am still finding a couple of those. I do own uh a few explorers. So I do like exploration but it's you know I don't have expertise in that area even even though I mean I know more than the average person but I'm not a geologist so I'm not an expert there. Uh and it's it's very difficult. I I like to find with respect to explorers, I like to find the companies where maybe they already have something, they've already found something so there's a backs stop there and then if they can add to it, you know, they grow that discovery or they make another discovery. That's something that really intrigues me. Uh because I really like having that backs stop there, you know, because otherwise if you don't have that, you're really gambling on drill holes. And you know, for my investing, when I have lots of people that follow me and subscribe to my work, you know, I I can't be gambling on drill holes basically, you know, unless it's it's a companies that already have a backs stop. I do like producers and developers that are investing in exploration at the same time. I mean, you know, we saw with Kirkland Lake what happened where they were already in production and of course, you know, they made this fantastic discovery and then you can just mine that like you don't need to invest hundreds of millions to build a new processing facility. So I I think for me I like looking at the producers uh that are growing production, the companies that are building mines and on top of that the ones that are still investing in exploration where they can actually improve or enhance what they already have. But I do think Jesse, we are coming into a point where you know at some point it could be sooner rather than later where you will see money really pouring into the exploration plays and those stocks that haven't moved. I think size is the real key there. I mean companies that only have uh 1 million ounces or you know 20 or 30 million ounces of silver that's just too small for people to get interest. So, you know, I I'm more keen on silver exploration because it's smaller and it's just easier to track. And so, I I think the companies that have less than 50 or 45 million ounces of silver, if they can grow that to 100 million ounces, I think those companies can be the huge winners. So, th those are the companies that you want to look for with respect to silver exploration. You want the grade to be high. So, you want a grade that's 300 grams per ton. you want you want it to be likely that they're going to build a mine. You know that that's one of the important criteria points. So again, if you can find something that's under 50 million ounces that has potential to grow that to above 100 and it's it's going to be more likely than not it's going to be a mine and the grade is high enough. I think with respect to silver exploration that's what people should be looking at. Like you could, you know, the biggest winners will probably be again with respect to, you know, silver juniors in exploration, the ones that have less, you know, 20 or 30 million ounces right now. And then they could, you know, they make some fantastic discovery and it's 150 million ounces. It's really high grade. I mean, those stocks will just go through the roof. But again, I'm not, you know, that's not my area of expertise. But sooner rather than later, we're going to see a lot of money just flow into exploration and it's going to kind of confuse people because we we could see stocks going up for the wrong as Rick Rule says, you know, I make money on my mistakes. I mean, I think we could see that happen in the next few years. >> Well, that's a perfect segue into discussing the daily gold where you dive deeper into evaluating these gold and silver stocks. Why don't you tell us about that service and where people can find it? and also tell us about your book Gold and Silver, the greatest bull market has begun. >> Okay, thank you. If you go to the daily.com, uh there should be a signup link for my service there. Uh at the top right, uh so the daily gold premium, I publish flash updates, but mostly I do an update every Sunday. It's around 20 pages or so. I have tables, so I have a top 10 list. I mean, I have a model portfolio, but that's a real portfolio of what I'm investing in. Uh, and so I have these tables where I have a top 10 company table where you you can see the name, uh, market cap, the cash, and then lots of notes on the company. So I have I have pages worth of these tables. So I have a top 10 table. I have a top 10 watch list table. I also have a top 10 silver company table, which I don't publish as regularly, but I did do an update on that. Um, and with respect to the book, a lot of the stuff we talked about here today is in the book. I mean, the book is my it's a collection of my very big picture thoughts on precious metals. You know, why we're starting a new bull market, you know, where they could be going in the next five or 10 years. Also, you know, I talk about I have a chapter that's basically the history of gold stocks, you know, booms and busts and, you know, why at some point we're going to have a big bust like I was talking about. Um, at the end of this decade, 60% bare markets are pretty common. I have a chapter on juniors and so I talk about what I look for, which is that sweet spot. Um, Lobo Tra, I think if you interviewed him, he calls it the uh what the production sweet spot. So I >> pre-production >> pre-production yeah pre-production sweet spot. So I I like looking for things in that area as I talked about before uh companies that are growing production companies that are building mines and I I give some criteria there about what people should look for. You know management size is a big thing. It has to be a certain size uh because if it's too small you can still make money on small things but when it's too small there's just the professional investors ignore that. So yeah, you can you can you can order the book off Amazon, but you can get it for free. You can get a PDF or an EPUB file if you go to the daily.com and you can opt in there right at the top. So, and I also put a lot of videos from the book on YouTube. So, if you go to my YouTube channel, uh there's a playlist where I have all these lessons and I think the two on gold stocks and juniors, I think they're lesson like seven and eight or nine and 10 or eight and nine. Those are the lessons that people can look for. So yeah, I I published quite a bit of content, but in the newsletter, you know, in the last couple years, I really started focusing more on companies and company analysis, even though my bread and butter is technicals. That's my trade. That's what I understand. But I've been investing in the sector for 20 years. And in the last couple years, I really, you know, I really started to realize, you know, what really matters is picking the right companies. Like market timing can help you, but and I'm a technical analyst saying this, so you know that it's true. You're going to make way more money buying the right companies and holding them for the long term than you are trying to trade in and out and trade every wiggle. Now, you you have to buy the right companies, but then you have to manage them. I I teach people how to trim when you have big winners. You you're selling a third here, you sell a fourth, or maybe you sell a half if you're really worried about a big correction. Uh but you know, buying and holding the best companies, buying at good values and holding, that's the way you're going to make big money in this bull market. Trading in and out, that's not going to work. That's just gambling. So, I would really encourage people, become an expert on companies, watch company interviews on YouTube. that's going to help you in the long run more than, you know, I know that these macro videos on YouTube are great and entertaining, but a lot of that stuff is just noise. I mean, predicting macro is extremely difficult. You and I could we could we'd go on and on if we talk about how many times people have predicted another 2008. I mean, it's been happening since 2009. I've been following everybody for 20 years. Okay? These macro predictions have been terrible and they've not panned out. And it was it was the same for me. I include myself in that group because a lot of my macro predictions three, four years ago, they didn't pan out. And so that's why, like I said, a couple years ago, I just realized, hey, we're going into a real bull market here, a new secular bull market. Buy the right companies. You're going to make the most money by buying the right companies, holding them, trimming gains when they go up way too much, but you're still holding a tiny position that, you know, and then you rotate that capital into better values and better opportunities while letting a piece of what you own run. you're going to make the most money doing that than trying to guess like what macro development is going to happen. So that's just my that's the end of my diet tribe. But I really strongly believe that most people focus on the companies and you can call these companies. You're you're not you're not calling Nvidia or Microsoft like most of these companies like you can call the CEO and talk to them. So it it's so important. Just become an expert on these companies. you're going to make way more money picking the right companies uh than than trying to time the market or you know assess macro developments. >> I love that approach. I'm going to put links below to the Daily Gold uh where people can sign up for the service or grab the book and as well as your YouTube channel so people can tune in to those lessons you mentioned. Jordan, it's been a fantastic conversation. Thank you so much for coming on the show. >> Hey, my pleasure, Jesse. Thanks so much for having me. I really enjoyed it. >> Thank you for joining us today. Take advantage of arc silver gold osmium specials right now. Silver kangaroos 2023 1oz coins $247 over spot. Silver maple leaves 2025 1oz coins only $2.87 over spot while supplies last. Reach out to owner Ian Everard today at 3072649441 or by email at ianarchsggo.com. Make sure to tell them that Commodity Culture sent you. 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SILVER Set For '2nd Biggest Breakout in HISTORY' – 4 Digits Will Happen: Jordan Roy-Byrne
Summary
Transcript
Hello everybody and welcome into commodity culture where our goal is to make you a better investor in the commodities sector. My name is Jesse Day and on this episode I'm thrilled to welcome Jordan Roy Burn to the show, precious metals analyst, publisher of the daily gold newsletter and author of Gold and Silver, the greatest bull market has begun. We're going to dive into why Jordan believes we are at the very start of an epic bull cycle in both gold and silver that could last a decade or more. How high could both metals go? And what are the signs to look for that it's time to take profits? We're going to unpack why Jordan thinks the coming breakout in silver will be the second biggest breakout of any asset in history along with unpacking his approach to the precious metals mining sector and why he sees tremendous value in the miners ahead. All of this and so much more ahead in my conversation with Jordan Roy Burn. Jordan Roy Burn, great to have you on Commodity Culture. I want to kick things off with a very interesting thread you posted on X recently titled, "No 2008 replay for gold or gold stocks is coming anytime soon." Walk us through your thesis here and why you think our economic and market environment today is more similar to the 60s and the 70s than to 2008. >> Okay, there's a lot to unpack there. uh I'll do the best that I can because there's so many things uh that are giving me a strong argument for this and and we're fighting against recency bias here because everyone was shell shocked by 2008 especially in precious metals in juniors in hard assets. So because of that and also you had a mini replay of that in 2020. So everyone has a very heavy recency bias of this and Jesse people were talking about this a year or two years ago. people were talking about, oh, we're going to see a big crash. This was in 2023 when uh gold was consolidating for three and a half years in the handle part of the the cup and handle pattern. Uh you know, the miners were still down a so it was just so ridiculous to me that it just when again when people were talking about this a couple years ago, it really served to to show you how heavy uh the recency bias that people have is at this point. But the very big picture in markets is we're in a we're very similar to the mid to late 1960s and the reason for that the biggest reason is if you look at the bond market a secular bare market in bonds began in the last couple years. We all know that now one also began depending on how you measure it the mid to late 1960s in that area but for me it was really in 1965. And when you have a secular bear beginning in bonds, what happens or what has happened in these two instances is after that happened, capital at the beginning basically started moving into bonds or excuse me started moving into stocks continued to move into stocks but then gold at the same time. Now gold was fixed in the in the mid60 or until 1971. So gold stocks were really the proxy uh for gold. And so you go back to 1964, gold stocks broke out of a 37-year long base, a spectacular breakout uh that led to, you know, fantastic performance really from 1960 to 1980. But I liken what happened in the gold stocks in the mid60s, very similar to gold's recent breakout uh last year uh in March of 2024. It broke out of this super bullish 13-year cup and handle pattern. the second biggest breakout in gold's history. The first being gold's breakout in 1972 uh which was actually a 100year breakout. You got to go back to the civil war. Uh if you look at that much data, you can see how significant that breakout was. So recently we have the second biggest breakout in gold's history uh with respect to gold. So if we're looking at what h what's happening in precious metals and the bond market very similar to the mid60s and at the same time if you look at the stock market if you look right now the stock market is still in a secular bull and my demarcation line for that is the 40-month moving average. So in the last 3 four years there's been a couple times where the market's come down but it's successfully tested the 40month moving average and continued to rise. And so like it was until the end of 1968, it's still in a secular bull market. So that mid 1960s period where you had stocks going up and precious metals going up at the same time. Very rare. There was some overlap there. Uh but so so because of that and because of the bond market there there's just really strong similarities. And in the mid60s you started you had a breakout at in inflation. So you did see from 65 to 68 you saw inflation rising. although it really didn't get terrible until the 1970s. So based on that, uh we're very similar to the mid to late 1960s. Uh but circling back to 2008, one thing if you look at precious metals bull markets, there was that big decline in the middle of it. So you had 2008 in all precious metals, you had the same thing in 75 to 76. So, if we're looking at a secular bull market that just began in precious metals and if we look at the last two um you know then we'd think okay well there's going to be two really strong legs and maybe in the middle you get that nasty bare market but we just broke out of the cup and handle pattern and there there's lots of other reasons like if you look at various other charts and I don't want to bore you by going through them all but if you look at those charts at least the gold price in real terms like if you're looking at gold against the monitor ary base gold against the stock market. If you look at um you know the ETF flows um if you look at um I think I already said gold divided by the stock market but like if you look at for example if you look at the ETF flows and the percentage of capital that's in gold uh it's like or in gold ETFs it's like less than 2% right now in 2008 that was 8%. So that's another example. So, if you look at all these things and then you look at the breakout from the 13-year long cup and handle pattern a year ago, all those things tell you we're in a new secular bull market for gold. Like, this didn't begin in 2016 like some people think. Like, this really began a year ago. And so, you you put those things together, you consider the history. Well, there's a big bare market in the middle. We're nowhere close to that middle point yet. And in addition to that, I already mentioned the bond market. 2008 we didn't we were in a secular bull market in bonds in the mid 1960s we were not we were in a secular bare market and if you look at the history of the bond market Jesse from 1920 to 2020 that's a 100red years the only time you lost money in bonds was 1965 to 1982 so people are very unaccustomed to a secular bare market in bonds like our our historical frame of reference is only the mid to late60s uh and then the 70s until 1982. And so what happens when you have a secular bare market at bonds is you don't get crashes in the stock market. Like if you look at that period 65 to 82, the worst bare market was 74 to 75, a 48% bare market. But what happened typically in a bare market, you have three parts, but the crash comes in the middle. You have the first part where people don't even know you're in a bear. Then you get the recognition move, you know, the crash or the accelerated downside move. Then people are like, "Holy you know, we know this is a a bad bare market." And then after that's over, you might have a little bit more of a leg down before it ends. But the two worst bare markets in that 65 to 82 period, 68 to 70 and then 74 to 75, the worst part was actually at the very end. So that 48% bare market in the mid70s. If if you look like 18 months into it, the market was down 23%. So it was a bare market, but it wasn't really considered a really bad market until the last three or four months when the bottom fell out. So that's very unusual. But but but again stepping back, if you look at all the the famous crashes in the stock market, 29, 37, you know, 87, 2000, 2007, all those periods, you had a secular bull in bonds. Why is that important? Because when you have a secular bull in bonds, there is a easy alternative for mom and pop and retail investors. They say, "Okay, I'll just go into bonds. I can get my 4%." You or even, you know, hedge funds or, you know, uh, uh, pension funds and the like, those organizations, you know, if there if there's a secular bull in bonds, they can always sell their stocks, go into bonds, and get their three or 4%. But we know that you can't do that anymore because there's a secular bear in bonds. Now, sure, we might get a downturn at some point. But we'll get a bounce of bonds but the major trend is down. And so this is really rare. Again, we haven't seen this through the mid since the mid1 1960s. So that's why in that period if you look at actually 62 to 82, you have more frequent bare markets, but you don't have crashes. So that's different than 29 to 37, 2000 to 2011. We had the two big uh bare markets in those secular bare market periods. But again 65 to 82 or 62 to 82 you had something like 8% bare mark eight bare markets uh eight declines of 20% or more like you could get 62 there was one 66 then you had 68 to 70 then you had you know the one in the middle then you had 1978 so you had and then you had you know 80 and 82 so during that entire period you had frequent bare markets but really no crashes and if you go back to 2018 we've had you know a handful almost of 20% declines but no crashes. So, uh yeah, there's just numerous reasons here pointing to that. And then the most important reason and I hope I can explain this because it's a little difficult to explain, but I have this indicator that I constructed which is gold against the 60/40 portfolio. So, gold against 60% stocks, 40% bonds. And so when gold is in a precious or when gold or precious metals are in a secular bull market, capital is moving away from stocks and bonds and into gold. And if you look at this indicator uh it broke out uh of a base in the early 1970s, 1972, it broke out and then it shot higher. Now the same thing happened in 2002 where it broke a downtrend. It moved above the long-term moving averages. And so th those points signaled really confirmed, okay, we're starting a new bull market in precious metals. Now earlier this year in March, that ratio broke out of a 10-year long base. And so the last two times that broke out, again, beginning of 72 and I think the beginning of 2002, you were around the point where there was a negative or inverse correlation between precious metals and the stock market. And so when capital rotates away from stocks and goes into hard assets and gold, you know, as evidenced by gold against the stock market or gold against my 6040 portfolio, there has there has to be a point where one is going up and the other is going down. Like it doesn't with respect to gold, it doesn't really happen where okay, well, gold's just going to start running a lot more than the stock market. I I know that that's kind of happened in the last couple years and we go back to the mid60s and you know if you look at gold stocks against the 6040 that broke out in ' 65 but with respect to gold itself when capital is rotating from one asset class to another with and again we're looking at you know we have stocks and bonds and then gold which is the granddaddy of all hard assets. So when capital is moving out of stocks and into gold that signals the start of a real bull market in gold. But there has to be a inverse correlation between the two where okay stocks are rolling over they're going down and that people are selling that money and then that money uh is going into gold. And so that's how you get uh an inverse correlation and it has to happen at the beginning of a new secular bull market in gold. can't happen in the middle or the end. So what happens at the beginning because at the beginning of a new secular bull in gold you people are still in stocks like you don't have a lot of money that's in gold. We know that central banks have been big investors but if you look at the retail audience and ETF flows and you've had other guests talk about this there's very little money even though we've done very well the last year or two there's still very little money in the sector. And so that's what happened in the early 70s and early 2000s. was very very little money in the sector when you had that downturn in the stock market. 2008, remember we were seven years into or six plus years into a period of when gold was outperforming the 6040 portfolio here and now like we're only a couple months into that. So there's not with respect to and again you go back to 2008 there was at that time there may have been more money in gold and gold stocks than actual you know regular conventional stocks because again you had six plus years where gold was already outperforming the 60/40 portfolio. So there was way more money in gold and precious metals at that time compared to the stock market. Now it's still, you know, it's still different because or completely different because again the stock market is still in a secular bowl. So what's going to happen? I'm not saying it's going to happen in the next month, but I think at some point, you know, could be in the next couple months, the next couple years, but that next downturn we have in the stock market, you're going to see precious metals decouple and uh, you know, outperform during that secular uh bear in the stock market or during the cyclical bear that begins the secular bear as happened in the early 2000s uh in the early uh early 1970s. So, I know that was a really long answer. appreciate you giving me the time to lay it all out, but yeah, it it's very technical, but it revolves around, you know, what's the very big picture? What's the macro market picture? What are capital flows doing right now? And again, the most important part is there's very little money in precious metals. And when the stock market rolls over and goes into a secular bear, as it did in the early 70s, early 2000s, that capital has to go somewhere. And by the way, uh you look at the 1970s, early 2000s, you still had a secular bull and bonds. In the 1970s, the the uh inverse correlation between gold and stocks was even stronger. And that's because of the secular bear and bonds. So when the stock market rolls over, yeah, some money might go into bonds naturally, but some of that money is going to go into gold, you know, because bonds are an iffy proposition. So again, I know I know it's it's a lot to take in, but I'm very confident in this and it's really important for people to understand this because, you know, it's easy just to default to recency bias to just assume there's going to be this big 2008 replay. It's not going to happen. But I will say, like we talked about at the beginning, there is a point in the middle of secular bulls and precious metals when you do get that nasty bare market. So, I don't know, maybe that's 2030 or 2029 or the end of 2028, but we're we're so far from that point right now. >> And now, a quick break to hear from our sponsor. Ark Silver Gold Osmium owner. Ian Everard is considered one of the most honest and levelheaded gold and silver dealers in the United States. Praised even by his competitors. So, give him a call today to take advantage of the specials right now. Silver kangaroos 2023 1oz coins mint fresh only $247 over spot. Mint fresh silver maple leaves 2025 coins 1 oz $2.87 over spot while supplies last. Reach out today at 3072649441 or by email at ianarchsggo.com and make sure to tell him that commodity culture sent you. And now back to the interview. Very well explained. And don't worry about take all the time you need to explain these concepts because as you said, it's very important that people grasp them. What I want to know is what are the indicators that you'll be watching for to know that we're reaching the end of this secular bull market in gold. Now, you said that we're close to the beginning at this point. That obviously means you see a lot more upside potential ahead in the gold price. So, I guess two questions. How long do you think this bull market could continue for? And what are the indicators you'll be watching for to note that okay, maybe now it's time to get out of this trade where it it's starting to reverse course. >> Yeah, for the overall secular trend, I think we're at least going to the mid 2030s, you know, maybe a little bit longer than that. Um, you know, if you look at, okay, when if you look at when the stock market began its secular bear, you go all the way back to 29. But when that happened, 1929. When did the gold stocks in the 30s when did their huge move stop? 1937. That was 8 years after the peak in stocks. You go back to the 60s and 70s, very end of ' 68, stock market rolled over, new secular bear. So that was 11 plus years when you had the 1980 peak in precious metals. You go back to the 2000s and so it was the uh it was two 2000 was the peak in that secular bull and so then precious metals peaked 11 years after that. So that's another way of looking at it. If you look at the the last two were 11 years. So you know may maybe if it's 2026 or or you know we could use 2026 but if that's the end of the secular poll and if we're looking at that history it'd be 2037. I am confident we are going to see it last uh at least until the mid30s or really close to that point because what'll happen we're at the beginning now and and you know this run now maybe it'll continue like I said to 2029 or 2030 and then you have a bare market for a year or two and then you know you could throw another three or four years on top of that but but yeah my for for here and now my focus is really on the next few years because we're in a cyclical bull and that's really you know when when that uh a bare market crash in the middle when that comes about. Uh I mean that that's like a bear a bearish concern that I have, but again that's several years away. Uh so I'm more I'm you know more keen on that. But as far as the big picture, another thing to keep in mind is I'm not a big cycles guy because they're really subjective. I mean they're really backwardlooking. They're not predictive. But there there's a there's one cycle that's really interesting and that is you have a major peak in inflation every 60 years. You have a peak every 30 years. And you could go back, okay, every 60 years. The 1860s, the Civil War, that was a major peak. 1920 was a major peak. 1980 was a major peak. So that takes us to 2040. If you look at every 30 years, 1920, 1951 was a big commodity inflation peak. 1980 was another one. 2011. So both of those line up for 2040 and every 60 years you have a major inflation peak. So for the overall uh commodity trade as a whole that's something that could last like another 13 14 15 years just based on the history. And again I'm not a I'm not a cycles guy but it's really interesting how you do get this inflation peak every 30 years and major peak every 60 years. But with respect to gold, Jesse, it's harder because we don't know. I mean, if if things get so out of control and, you know, maybe we go back on the gold standard in 2036 or something, you know, that could be the end of the gold secular bull, but you might have, you know, silver could last a couple more years or copper, oil could last a couple couple more years. So, um, yeah, as far as when it could hit, that's where you talked about indicators. I think time is just going to be a big one. Really, time. I mean, I could I could give a bunch of other answers. Well, we could look at, you know, gold against the 6040 doing a moonshot or gold and silver going parabolic. Um, but it it it's really time. I mean, it it's going to take time to play it. And I and I again, I don't think that this run in the next couple years, I don't think that's the end of it. You know, I think that's just the first phase. And then again, like I said, you get a cyclical bear around 2029 or 2030, you know, and then you have one more move after that. >> Let's pivot to the silver sector for a moment here. And I'd love you to separate some fact from fiction for us because it's obvious you have a very practical, level-headed approach, and silver is a topic that gets very hyperbolic. All sorts of prices get thrown out. I had Lynette Sang on the show last week. She said, "Silver's true value should be at least $1,300." That's about the highest I've ever heard anybody mention, but it's very regular for guests on the show to say triple digits are a certainty. You hear $500. Obviously, $50 silver is that big target. Um, what are your thoughts on the trajectory of the silver market? Because obviously to get back to 1980 all-time highs adjusted for inflation, we would need to be close to $200 today. Is tripledigit silver a realistic proposition in your view? And what are your overall thoughts on the silver sector? Yes, if you're giving me an open window as far as time, then I would say yes, silver is going to hit all those targets. And this is based on the the technical work that I do. And I'm looking at a 100red 200year charts. And what's really interesting, Jesse, is I mentioned the gold breakout in the early 70s. That was the biggest breakout of all time in capital markets history. You had gold tested this base at 45 or it was I think three times maybe. Yeah, about three times. So then in the early 70s it broke out of a 100redy year long base breakout of all time. I mean the m just think about that move like it went from 35 to 200 I think in three plus years and then you eventually it went to almost 900. Silver of course has this beautiful big bullish base. I you know I don't want to get into minutia but technically it's not a cup and handle because the handle part corrected way too much. Like if you look at gold's chart at a perfect cup and handle because the handle only retraced 38% of the gold price whereas silver its handle would have since 2011 it would have had to stay uh above 32 for it to be a proper cup and handle. So it's technically not a cup and handle. However, that aside, it still is in a super bullish base where you have this what are we at a 45 year long base. And so to me I'm I'm looking at everything. This will be the second biggest breakout of all time. It's not going to exceed what gold did in the early 70s, but still this is really exciting for silver. And if you look at other commodities, like I looked at when copper broke out in the mid 2000s, when oil broke out in the mid 2000s, and their bases were I I think uh like 30, you know, 30 years and 24 years respectively after they broke out. I mean, they they made some really big moves in a short amount of time. like copper really exploded and so looking at those breakouts and then thinking about what silver could do, which is another commodity, you know, I mean, I think it could probably go to 90 or 95 bucks after the breakout within 12 to 15 months. And I I I say that not to say everybody should line up and buy out of the money call options because it's going to happen. But I say that because we have to understand the setup like this is an extremely powerful setup that's going to give way to a spectacular breakout at some point. May maybe it's going to be next year. And I think that all those targets mentioned by all your guests, I think we're going to hit all those targets in, you know, in time eventually. You know, saying silver could go to a thousand, that doesn't help anybody make money right now in the next couple years. But if you look at gold against the monetary base and you look at gold against the stock market and you look at what levels were these ratios at when we had those peaks in 1980, you know, in 1934, 1942, you look at those levels um and where we are here and now, you know, that gold can get to 20,000 easy based on that history. And um you know if you look at again if you look at the major peaks in the gold silver ratio they're all under 20. So what does that tell you that yes silver can go to four digits which but it's really it's really for entertainment purposes because you you know no one's going to make money investing based on these targets that are not going to be hit probably until the next decade. Maybe not until the very end of the next decade. But again I like to focus on the the shorter term the next two or three years. But yes, silver does have that setup where I mean if it breaks 50, it's really gonna go crazy. So we're and you know we're getting pretty close to that point. Like silver in the last year or it's had to chew through a lot of resistance. 26 28 now it's it's finding less and less resistance. There's a little bit of resistance at 42 41 42. So we might stop there for a little bit. You know, we'll probably stop at 50 for at least a little while. But, you know, as a technical analyst, I mean, this is set up for the second biggest breakout of all time. So, it it's, you know, we're in the next couple years, like we really could be looking at $100 silver. Like, it it's I mean, all the targets that people have been talking about in recent years, you know, that have seemed ridiculous. We're getting closer to that point. I mean, especially $100 silver, we're getting much closer where this can actually be a reality in the next few years. >> Great analysis. this. And it should also be noted, silver did hit $40 at one point today, and as we speak right now is at $39.70. So, knocking on the door of that $40 level. Gold also at all-time highs as we speak. Very fascinating developments. I want to talk about gold revaluation for a moment because this is something a lot of my guests have spoken about. Before we hit record today, you said, "Yeah, you don't really pay too much attention to that. It's a little bit more noise than signal to you." Maybe you could walk us through your thoughts on the US revaluing its gold reserves. Do you think this is a realistic proposition? Would it have any far-reaching implications? And and why is it something that you don't really focus on? >> And admittedly, this these some of these areas are not my strong suit. I'm a markets guy. I'm a technical guy. So, I like looking at as much as I can technically and then also looking at data. So, I'm more of a you know facts, objective facts over the subjective. And so this is subjective. And if you look at the numbers, I I think to re I think for to revalue gold where it would really make a difference, like you might need to revalue it to $100,000. Like just revaluing it to 3500 or 4,000, there's so much debt that that's really that's really not going to do a lot. Like if you look at um the uh gold against the monetary base, like if if if you wanted to back 100% of the monetary base, the price is probably around 20,000 $23,000 an ounce right now. But then if you look at the how much gold we have and then the debt it's just you know if you again if you use like 4,000 or you know 35 you would need to put a zero on the end of it to even come close to making a difference with the debt. So this is not really going to improve our balance sheet that much. And and so with a lot of stuff we have to look at signal versus noise. And I remember Bob Morardi, you probably interviewed at some he talked about this, you know, like 10, I don't know, five, 10 years ago, and I always took that with me like what's signal, what's noise. And so in precious metals, especially on the analysis side, there's a lot of noise. And so, oh well, they're going to revalue gold, you know, what is that like? That's noise because we don't know if it's going to happen. Maybe it'll happen, you know, maybe it won't. And like I said, just looking at the numbers, this is not, you know, this is not that significant. Like I guess us gold bugs, we like to dream that there's going to be this sudden huge increase in the price, but I don't see I mean, even if they said gold was worth $10,000 an ounce. There would, if that happened, there would probably be a lot of selling. it would probably come down 50%, you know, in in the next couple days or couple and it would just totally mess up the structure of the market. So, and and I just think it's noise because we don't need that. Like just we're in a real bull market. It's going to last for another decade at least and we're going to see this fanatical prices that people have been predicting. they are going to get hit in time. And so we don't need the government to revalue gold or silver. It it it's just noise. Like it it doesn't matter. Like we're we're going to hit those targets and people are going to make a lot of money in this bull market without the government needing to get involved. >> Well said. I want to hone in on the gold and silver mining sector. Both areas of the market that have started to perform exceptionally well in the past few months. GDX, GDXJ, and SEL ETFs all up approximately 70% year to date. Obviously, vastly outperforming the broad market and the metals themselves. What is your thoughts currently on the precious metals uh miners? Is it is it similar to the metals themselves that you think we're in the beginning of a long-term bull cycle? Yes. I mean where we are here and now specifically we are in the real sweet spot when the stocks are going to outperform the metals. And one great indicator uh which can help you figure out if that's going to happen or not. I know people like to use the gold oil ratio but I discovered something when I was writing my book. If you look at the inflationadjusted price of gold, like if you look at that going back a hundred years, other than in the 1960s, which again was kind of a unique period, the chart of the Barren gold mining index or you could look at GDX or XAU like the the chart of that is very similar like the shape and the slope is very similar to gold against the inflation adjusted price. And I remember, you know, 20 or 10, 20 years ago hearing, oh, gold against the CPI, it's going up. And I thought, well, that doesn't mean anything. Who cares? Like, that doesn't mean anything. But then I discovered this and I realized, oh, this is really significant. You know what? Why are these two charts so similar? And again, we're looking at a hundred years, you know, not just like the last month or two. And the reason is gold stocks, they follow the margins, you know, the profitability of the mines, which can be described with cash flow. How much cash are these mines generating? And so a great indicator for that is gold minus cost. What are you going to use for cost? I know that some people use or gold divided by cost. I know some people use commodities, gold divided by commodities and and they use oil at the same time, you know, but I looked at that, but it didn't quite fit what was going on the stocks that well. And so then when I saw this in the CPI, it makes really good sense because the CPI is just it's inflation, but it's it's an indicator um of mining costs. And so again, the gold stocks and silver stocks as well, they're going to follow how the gold price is performing in real terms, how the silver price is performing in real terms because sure, the gold price can be up 50%. But what if costs are up 50%. You know, we saw this in 2020 and people have been saying that, you know, and just not to go on off on the side of diet tribe, but people are talking about, oh, well, you know, the the gold CEOs like, oh, these companies are terribly banished. But if you look at in 2020, you know, or or 2022, you know, gold was at or even 2023, gold was at the same level it was in 2011. Like you had 12, 13 years where gold is at the same price. How much how much have costs gone up since then? Like massively. And so this this happened again from 2020 to to 2024 where you had you know gold was going sideways, gold was near 2000. It rebounded but the stocks weren't doing anything. That's because the costs were up so damn much. You know this wasn't bad management. It it you know I remember tweeting about this you know a couple years ago. Have you seen any tweets recently about people saying the gold miners like they're managed poorly? I've heard a lot of a lot of guests have have brought that up particularly in regards to the last gold mining bull cycle and of course I have heard feedback to to that effect um to some people I've spoken with as well >> right but at least on my feed like compared to like two years ago or three years ago it was people would comment about gold oh terrible management they're poorly man but they would never point out that look the gold price I mean the real gold price gold divided by the CPI was down like 20 or 25%. You know, when your costs are going up and then the the the gold price which you sell had not broken out yet, that's a really hard business to manage. But now it's it's you know the complete opposite because because by the way if you look at gold against the CPI that earlier this year broke out of a 45 year long base. So you know we are in a real sweet spot for the miners right now. And it's the same thing like if you look at silver divided by the CPI and you would just put SIL underneath and you look at the last 15 years, it's almost identical to how they've moved. So again, gold and silver stocks, they move based on the real price because the real price where you could look at gold against the CPI or silver against the CPI, that is a strong indicator for margins or the profitability of these mines. And so we are in a real sweet spot right now where gold already broke out. You know, it has no resistance. It's a new all-time high territory. And so it's been crushing it. And you know, I'm sure the costs are up two, three, 5% a month or not a month, you know, per year. Uh but again, gold is just crushing it. So the real price is going like that. And we're going to see the same thing in silver when it breaks 50, you know, because like I said, silver could jump to 100 in 12 to 15 or 18 months after it makes that breakout. And so then the profitability of silver mines and silver production is going to go through the roof even if you have you know even if cost inflation is going up 15% or 10% or 18% a year at that point. So we are in a real sweet spot now but at some point and who knows maybe it'll be two three years when you get into a a situation where okay cost inflation is really starting to ramp up but then metals prices slow down. that's when the stocks won't do as well. So, at at some point that'll happen. But, you know, at least for right now and probably at least for the next 12 to 18 months, we are in a real sweet spot for the miners where the real price of gold and silver, they're going to keep moving higher. They're going to keep outperforming uh rising costs and and cost pressures. >> And where are you looking right now within the mining sector for value? Is there still um opportunity to be had in the bigger names, your barracks, your new Agniko Eagles, the royalty streamers, the ETFs? Um are you looking downstream at the the developers, explorers, all of the above? What what is your approach currently to the uh gold and silver mining space? Well, in my newsletter, I focus mostly on junior producers, uh, junior developers, companies that are building mines because that's when you get the best rerating when you build a mine or you're you're growing productions. That's when you have predictable outperformance. But as we know, a lot of those have moved a great deal. So, I am still finding some of those that are turnaround stories for, you know, for various reasons. I I am still finding a couple of those. I do own uh a few explorers. So I do like exploration but it's you know I don't have expertise in that area even even though I mean I know more than the average person but I'm not a geologist so I'm not an expert there. Uh and it's it's very difficult. I I like to find with respect to explorers, I like to find the companies where maybe they already have something, they've already found something so there's a backs stop there and then if they can add to it, you know, they grow that discovery or they make another discovery. That's something that really intrigues me. Uh because I really like having that backs stop there, you know, because otherwise if you don't have that, you're really gambling on drill holes. And you know, for my investing, when I have lots of people that follow me and subscribe to my work, you know, I I can't be gambling on drill holes basically, you know, unless it's it's a companies that already have a backs stop. I do like producers and developers that are investing in exploration at the same time. I mean, you know, we saw with Kirkland Lake what happened where they were already in production and of course, you know, they made this fantastic discovery and then you can just mine that like you don't need to invest hundreds of millions to build a new processing facility. So I I think for me I like looking at the producers uh that are growing production, the companies that are building mines and on top of that the ones that are still investing in exploration where they can actually improve or enhance what they already have. But I do think Jesse, we are coming into a point where you know at some point it could be sooner rather than later where you will see money really pouring into the exploration plays and those stocks that haven't moved. I think size is the real key there. I mean companies that only have uh 1 million ounces or you know 20 or 30 million ounces of silver that's just too small for people to get interest. So, you know, I I'm more keen on silver exploration because it's smaller and it's just easier to track. And so, I I think the companies that have less than 50 or 45 million ounces of silver, if they can grow that to 100 million ounces, I think those companies can be the huge winners. So, th those are the companies that you want to look for with respect to silver exploration. You want the grade to be high. So, you want a grade that's 300 grams per ton. you want you want it to be likely that they're going to build a mine. You know that that's one of the important criteria points. So again, if you can find something that's under 50 million ounces that has potential to grow that to above 100 and it's it's going to be more likely than not it's going to be a mine and the grade is high enough. I think with respect to silver exploration that's what people should be looking at. Like you could, you know, the biggest winners will probably be again with respect to, you know, silver juniors in exploration, the ones that have less, you know, 20 or 30 million ounces right now. And then they could, you know, they make some fantastic discovery and it's 150 million ounces. It's really high grade. I mean, those stocks will just go through the roof. But again, I'm not, you know, that's not my area of expertise. But sooner rather than later, we're going to see a lot of money just flow into exploration and it's going to kind of confuse people because we we could see stocks going up for the wrong as Rick Rule says, you know, I make money on my mistakes. I mean, I think we could see that happen in the next few years. >> Well, that's a perfect segue into discussing the daily gold where you dive deeper into evaluating these gold and silver stocks. Why don't you tell us about that service and where people can find it? and also tell us about your book Gold and Silver, the greatest bull market has begun. >> Okay, thank you. If you go to the daily.com, uh there should be a signup link for my service there. Uh at the top right, uh so the daily gold premium, I publish flash updates, but mostly I do an update every Sunday. It's around 20 pages or so. I have tables, so I have a top 10 list. I mean, I have a model portfolio, but that's a real portfolio of what I'm investing in. Uh, and so I have these tables where I have a top 10 company table where you you can see the name, uh, market cap, the cash, and then lots of notes on the company. So I have I have pages worth of these tables. So I have a top 10 table. I have a top 10 watch list table. I also have a top 10 silver company table, which I don't publish as regularly, but I did do an update on that. Um, and with respect to the book, a lot of the stuff we talked about here today is in the book. I mean, the book is my it's a collection of my very big picture thoughts on precious metals. You know, why we're starting a new bull market, you know, where they could be going in the next five or 10 years. Also, you know, I talk about I have a chapter that's basically the history of gold stocks, you know, booms and busts and, you know, why at some point we're going to have a big bust like I was talking about. Um, at the end of this decade, 60% bare markets are pretty common. I have a chapter on juniors and so I talk about what I look for, which is that sweet spot. Um, Lobo Tra, I think if you interviewed him, he calls it the uh what the production sweet spot. So I >> pre-production >> pre-production yeah pre-production sweet spot. So I I like looking for things in that area as I talked about before uh companies that are growing production companies that are building mines and I I give some criteria there about what people should look for. You know management size is a big thing. It has to be a certain size uh because if it's too small you can still make money on small things but when it's too small there's just the professional investors ignore that. So yeah, you can you can you can order the book off Amazon, but you can get it for free. You can get a PDF or an EPUB file if you go to the daily.com and you can opt in there right at the top. So, and I also put a lot of videos from the book on YouTube. So, if you go to my YouTube channel, uh there's a playlist where I have all these lessons and I think the two on gold stocks and juniors, I think they're lesson like seven and eight or nine and 10 or eight and nine. Those are the lessons that people can look for. So yeah, I I published quite a bit of content, but in the newsletter, you know, in the last couple years, I really started focusing more on companies and company analysis, even though my bread and butter is technicals. That's my trade. That's what I understand. But I've been investing in the sector for 20 years. And in the last couple years, I really, you know, I really started to realize, you know, what really matters is picking the right companies. Like market timing can help you, but and I'm a technical analyst saying this, so you know that it's true. You're going to make way more money buying the right companies and holding them for the long term than you are trying to trade in and out and trade every wiggle. Now, you you have to buy the right companies, but then you have to manage them. I I teach people how to trim when you have big winners. You you're selling a third here, you sell a fourth, or maybe you sell a half if you're really worried about a big correction. Uh but you know, buying and holding the best companies, buying at good values and holding, that's the way you're going to make big money in this bull market. Trading in and out, that's not going to work. That's just gambling. So, I would really encourage people, become an expert on companies, watch company interviews on YouTube. that's going to help you in the long run more than, you know, I know that these macro videos on YouTube are great and entertaining, but a lot of that stuff is just noise. I mean, predicting macro is extremely difficult. You and I could we could we'd go on and on if we talk about how many times people have predicted another 2008. I mean, it's been happening since 2009. I've been following everybody for 20 years. Okay? These macro predictions have been terrible and they've not panned out. And it was it was the same for me. I include myself in that group because a lot of my macro predictions three, four years ago, they didn't pan out. And so that's why, like I said, a couple years ago, I just realized, hey, we're going into a real bull market here, a new secular bull market. Buy the right companies. You're going to make the most money by buying the right companies, holding them, trimming gains when they go up way too much, but you're still holding a tiny position that, you know, and then you rotate that capital into better values and better opportunities while letting a piece of what you own run. you're going to make the most money doing that than trying to guess like what macro development is going to happen. So that's just my that's the end of my diet tribe. But I really strongly believe that most people focus on the companies and you can call these companies. You're you're not you're not calling Nvidia or Microsoft like most of these companies like you can call the CEO and talk to them. So it it's so important. Just become an expert on these companies. you're going to make way more money picking the right companies uh than than trying to time the market or you know assess macro developments. >> I love that approach. I'm going to put links below to the Daily Gold uh where people can sign up for the service or grab the book and as well as your YouTube channel so people can tune in to those lessons you mentioned. Jordan, it's been a fantastic conversation. Thank you so much for coming on the show. >> Hey, my pleasure, Jesse. Thanks so much for having me. I really enjoyed it. >> Thank you for joining us today. Take advantage of arc silver gold osmium specials right now. Silver kangaroos 2023 1oz coins $247 over spot. Silver maple leaves 2025 1oz coins only $2.87 over spot while supplies last. Reach out to owner Ian Everard today at 3072649441 or by email at ianarchsggo.com. Make sure to tell them that Commodity Culture sent you. 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