Fed Decision Impact: The Fed's recent rate cut and Jerome Powell's press conference are seen as positive developments for the gold market, providing an opportunity for consolidation and sustainable growth.
Gold and Silver Market Analysis: Gold and silver have shown strong year-to-date performance, with gold breaking out of a sideways pattern and silver aligning closely with gold's movements, suggesting a healthy consolidation period.
GDX and GDXJ Rebalancing: The rebalancing of the GDX and GDXJ indices is expected to cause minor market fluctuations, but presents buying opportunities as stocks adjust to new valuations without operational impact.
Economic Projections: The Fed's economic projections suggest GDP growth and a slight increase in unemployment, with ongoing debates about the impact of tariffs and the sustainability of growth driven by deficit spending.
Bond Market Reaction: Contrary to expectations, bond yields have risen following the Fed's rate cut, indicating market speculation on further cuts and the impact of continued quantitative tightening.
Barrick Gold's Positive Outlook: Barrick Gold's recent announcement of the Fourmile project in Nevada has surprised the market with its high-grade resource and potential for significant production, boosting the company's stock performance.
Market Opportunities: The current market environment offers opportunities for strategic investments in gold and mining stocks, with potential for continued growth as the market consolidates and adjusts to new economic conditions.
Transcript
The Fed cutting on Wednesday and Jerome Powell pumping the brakes in the press conference were the best thing that could have happened to us in the gold space. Controversial take, isn't it? But doing my homework and having digested now over the last 48 hours what we witnessed on Wednesday, I'm of I'm I'm very convinced that this was the right move for us in the gold space. And with that said, hello and welcome to a weekly wrap-up episode here on the on the Sore Financial YouTube channel. Really appreciate you tuning in. We have lots to talk about this week. Of course, we had the Fed meeting. We had uh uh really really insight. I had a great chat with Lobigra about it. Uh just about a 30 minutes after the the press conference ended, we we did a live session to dissect what Jerome Powell really said and what the market impact was. I'm going to recap some of that and share my insights of what I think the Fed has done and what it means for us in our in our niche here, meaning the gold and silver space, the mining space, and why I think it is the best thing that could have happened to us. I'll I'll elaborate in a few short seconds. As I said, we have a few topics prepared for this weekly wrap-up. We have to talk about the Fed, but also uh gold and silver. We'll take a look at the charts. What does it mean? How have they reacted? We'll look at some other asset classes of course as well. And uh the GDX GDXJ is being rebalanced tonight. What what does that mean? What are the impacts on the mining stocks? Timing of course is always interesting, but it happens twice a year. Nothing unusual about it. Uh update on that as well. There's some other changes happening uh based on what the GDX is based on uh other index it's tracking. And uh Bareric made a big move, big announcement or an updated announcement. It was a big announcement, but it wasn't really on my radar screen. It was a big surprise actually and the market took it as a surprise as well cuz they weren't aware of one of the projects they have in their portfolio and we will take a closer look at what Mark Bristo said at the Denver Gold forum but also take a closer look at that project and why did the market react the way it did as you recall is probably one of my hot stock picks here three weeks ago and the stock has delivered. We'll take a look at the share price here together in a second. But uh before we dive into it, uh let's take a look at the economic calendar together real quick. Uh let's take a look at just just this week. What did we get delivered? Let me bring this on screen and uh let's take a look together real quick. So what happened this week? Not much data like not much meaning okay I'm I'm I'm really underest or not underestimating buting what's the right term? I'm really not putting enough emphasis of course on the Fed meeting. That's what the whole market was concentrated on was focused on was the the rate decision and then of course the press conference by Jerome Powell. Really interesting how the market reacted to that and uh I I'll show you some uh charts in a few short seconds here to just to see what what what happened. Um let's let's take a look at this here. So we got the the Fed interest rate decisions, the FOMC projections. Of course, we got the summary of the economic projections as well, which is really which was interesting, which we'll dive into in in a second as well. And then of course the press conference. But uh before I forget later, and I tend to forget lately at the end, um I want to quick quickly take a look at next week. What can we expect in terms of data? What should we be paying attention to? Um I think as a as a highlight here is definitely the the chairman German Powell uh speaking next Tuesday. Probably we'll get some more color on on the interest rate cut. hopefully we get some more insights um into the inner workings of the Fed and uh who who was that one dot in the dot plot um that said well we're going to have a few more bigger cuts here maybe another percent 100 basis points by the end of the year maybe he'll shed some light on that during that that's why I think there's quite a bit of interest uh for for that speech otherwise um on Thursday we'll get the GDP number uh which which Jerome Pal also mentioned in his speech um that the growth is is is good growth is solid consensus is expecting 3.3% uh US growth uh quarter over-arter which is uh a significant jump of course and we can always debate whether that's paid for by US government dollars and excessive spending over $2 trillion um already this this year um in in terms of deficit so deficit spending definitely pushing growth uh the question is what what will this number be last quarter uh maybe we'll open this here real quick and take a look um it's US GDP growth rate. Uh last quarter it was negative.5%, now forecast goes back to 3.3%. Uh which which is quite bullish here and uh begs the question like why should the Fed cut further just from a pragmatic point of view. Let's uh let's leave it at that. Um so th those are the main points in terms of the economic calendar, personal income. I think uh those are all like those are interesting data points, but they're not earthshattering. They won't move the market unless there is a massive breakout to the downside, I believe. So, I think we can rule that one out. Um, let's take a look at some of the economic projections the Fed has put out as part of uh its its uh release here this week. Uh, so change in in in real GDP. They're expecting GDP to actually increase up to 20 uh 2027. Unemployment rate um that was a bit of a surprise. They're expecting it to take higher official number right now. And that's the official the government the BLS number is 4.3%. Uh the Fed actually expects it to go higher up to 4.5% by the end of the year before it comes back down again. But I didn't hear a explanation like why that should be the case. Like why should the unemployment number come down again magically? Um I don't see a big turnaround. Yeah, maybe in correlation with the economic growth that we're seeing one line above uh 2027 real GDP 1.9% but quite honestly I'm missing indications for that to happen and I don't think a 25 basis point cut warrants any of those projections. So, um, inflation the Fed and Mike Kef from Bloomberg asked actually that and we discussed that with Lobo on on Wednesday as well. But, uh, two years out, it's always 2%. It's always 2% two years out. And I made the joke, it it reminds me of free beer tomorrow that some of the pubs have, uh, uh, hanging on the wall, but tomorrow never arrives. So, it's uh, it's it's very strange. And we will have to figure that one out together. the impact of that as well. But he keeps leaning and I felt like he flip-flopped a little bit on his tariff impact on the inflation. I can't shake that feeling that he he said, "Well, you know, tariffs are inflationary over a longer period of time. Not all the tariffs hit at the same time." And now it felt like, and I went through the script again, he did say it, but then he pedled back in the next sentence yet again, the tariffs are just a onetime impact. And uh we we'll have to figure that one out because the US and China are currently meeting uh in in Spain and uh having their tariff talks. But uh so far I'm not very hopeful that we'll get a resolution to that tariff debate uh yet or anytime soon actually. Um so that that's that part um on on on the Fed. Well, let's take a quick look at how the market reacted to the to the Fed decision um as well. Maybe we'll start with I think the most interesting reaction here was from the bond market. quite honestly. Um I've got the 10-year lined up, but I'd love to show you the 30-year. Let's see if I can find it real quick. Um the US 30-year. Uh let me get Y in there as well. US. There we go. Um cuz it's ticking up. I Everybody expected, well, the Fed is cutting. Mortgage rates will come down, but the mortgage rates are based off and priced off the 30-year bond yields. Uh most of them at least. So, it's the inverse reaction. And we've discussed this here on the channel before as well, like why the market was so fixated on on a Fed cut because even a small cut, as you as you can tell, it's exactly what I expected. The the bond yields are running the other direction cuz maybe the market speculate on a bigger cut and we didn't see it. And the backpaddling by by Powell uh during the press conference didn't help either. Oh, by the way, I wanted to show you I had something queued here and let me show that to you as well. what what I mean. Uh it's sort of the first 30 seconds of of Chairman Powell's press conference here and let me play that for you real quick. >> Good afternoon. My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people. While the unemployment rate remains low, it has edged up. Job gains have slowed and downside risks to employment have risen. At the same time, inflation has risen recently and remains somewhat elevated. In support of our goals and in light of the shift in the balance of risks, today the Federal Open Market Committee decided to lower our policy interest rate by a quarter percentage point. We also decided to continue to reduce our securities holdings. And that la last part is why everything is moving the other direction. We are continuing QT. Yes, we're easing on one end, but we're keeping it tight on the other. I have yet to find more information on what that really means. The last number I heard was, well, we're we're we're selling off bal off balance sheet like assets here for $5 trillion, $5 billion a month. Um, which is pretty much a non-factor if you look at at the overall balance sheet that the Fed curates here. Um, but that's why like the market reacted very euphorically because yay, Fed Fed cuts plus two more this year. uh or more two two more or two two 25 basis point cuts more. That's why the market reacted so euphorically. But then he said this and uh that's why and that's when the market turned around. Um that's when this happened. Let's take a look at the fiveday because you can probably see it um right around the time the Fed uh sort of talked about. Let's see Thursday. There we go. Um so intraday that's exactly it. So we had the Fed announcement. Great. Three more cuts. Uh the 30-year actually drops a little bit and then it it uh or so the the 30-year jumps up because we're getting the two cuts and then we get the press conference and all of a sudden um this this happens this spike and that's exactly that half sentence that we're continuing to re to sell securities uh on the balance sheet. That's that's uh the whole indicator and that's why I think this is the best thing they could have they could have said coming from the gold angle and I'm going to show you why here on the gold chart and uh let's take a look at the gold chart. I forgot to share the 30-year chart I was pointing at but I think you get my point um when uh talking about this but so let's let's take a look at the gold chart. So year to date the absolute monster performance. Uh let's take a look. But I want to highlight two things. And uh let me see if I can use my rudimentary chart and trend line uh what do you call them? Drawing skills here. But my point is we've been in a sideways like I'm not going to show you anything. I'm not a technical analyst here. But my point is what I wanted to point out. We've been in a sideways movement here from uh what is it? April to like now just recently till like August. We broke out and I think Jerome Powell gave us the opportunity to consolidate and create this exact same pattern again. We will be moving sideways at least for the next 40 days. Um maybe on Tuesday some everything might change if Jerome Powell really changes his tune um from from this press conference which I highly doubt by the way but I think we get the opportunity to consolidate which is very very healthy. I was just talking with an analyst and a head of capital markets at one of the leading banks here in the mining space and he agreed this is very healthy. We need to consolidate. We need to let the stocks catch up to those new valuations. Q3 is almost over. We got 10 more days or 11 more days here in in Q3 and the average dollar gold price in dollars is going to be about $250 $300 higher yet again this quarter. Let the valuations adjust. Let the let everybody catch up and let gold consolidate. If he would have said if Jerome Powell would have said in the press conference we're cutting two more times this year absolutely we are going to do it which is by the way a very dangerous thing to do then we might have we might be trading at 3,800 30 $3,900 per ounce already. Um although gold might have priced in two cuts already. So, but but you get my point. Like we might have overheated. The whole market might have overheated and the euphoria that we all felt in Beaver Creek or at the mining conferences here over the last two weeks um might have actually boiled over which is not good. We want this to be sustainable and Jerome Powell gave us the opportunity to make it sustainable. We'll see what the charts tell us and what other impacts uh we'll we'll see from the geopolitical and just macroeconomic front. But I think the opportunity is perfect to consolidate and then yet again create that nice bull flag and break out that uh that is sort of my forecast quite honestly um with my very limited technical analysis but I do see that sort of happening in the chart and I'm kind of happy that you can already see it a little bit if you look at the monthly at the monthly chart here on on gold as well. Let's let's take a look at silver. um very similar um of course year-to- date fantastic performance. Um perfectly aligned with gold's performance as well. Um but I do like that we get the opportunity. Um silver is a bit more violent was was a bit more violent. Didn't consolidate as much as gold did. It had some catching up to do. If you look at the gold silver ratio, we're still at 86.6. Um it has been coming down, but now we're also seeing it's it's more or less oscillating here. It's uh staying within a range. uh it hasn't really broken up uh broken down or it hasn't broken to the downside. Uh use proper technical terms here. Uh quick look. I'm happy for silver to consolidate over $42. $42 has been an important resistance level and $42 ideally is also the new floor when it comes to that. Um talking about gold, Mike Mlone, uh he's a Bloomberg journalist. He's a senior commodities analyst over at Bloomberg. um has put out uh some some of his analysis and he he says, "Well, the gold red rally is getting scary." He put that out yesterday uh yesterday around noon. He always puts out his commentary on on the commodities market. Um scary to a degree because the move has been absolutely violent. So, I fully agree there. But uh what what I like seeing and what he's been commenting on is that the gold move that 3500 used to be resistance and now it's the new floor offering a lot of support and 4,000 might be his next key resistance target. Isn't that great? But uh please let's let's take our time to get there. I don't want to run there tomorrow. Let valuations of the companies catch up. Let us get another great quarter under our belt. Let's see more record operating cash flows, more free cash flows like we've seen last quarter. It's been amazing to read the quarterly reports. Everybody's been recording uh reporting records. Um what what so ne next thing here um on my agenda is we need to talk about the rebalancing um that we're seeing in the GDX and the GDXJ that's happening tonight. Um I've cued up a quick overview to to share with you. Let me just share this tab here. GDX rebalance. I hope you can see this. Um a lot of additions, weight increases, but also a lot of deletions. um just companies that will be deleted out of the GDX. So, there's going to be quite a bit of reshuffleling happening tonight. And uh let me break it down for you because I had to learn about how the GDX does that as well. Uh so at at market close um order order uh or traders can put in their orders for for trade at close up until like 3:45 p.m. Eastern time, 15 minutes before the close and then they will get matched once the market is closed. Um meaning looking at some of the names that will get deleted like a a Dundy precious metals has been on a fantastic run. It has been consolidating ever since these uh this rebalance has been announced as back in on September 12th. So you can see that the stock price has consolidated some of those stocks but uh or let me rephrase in the past this would have been shocking like this would have destroyed mining or not destroyed I'm using strong terms here strong language but it would have upset the trajectory of many of these companies but uh this this time around keep in mind we're in a bull market we're in a bull market for gold we're in a bull market for mining stocks so these these stocks will likely see a small dip on at at the open on Monday we'll see what the price discovery tells us. I'll see if I can track this over the weekend and try to make it visible on my X feed here at at JR Mining Guy. But I'm not expecting too big of an impact uh to be honest. And uh personally like or from the fund perspective, we kept some cash on the sidelines to buy more of some of the positions, some of the positions we actually hold in the portfolio that will get deleted. And uh I'm excited about it because we get to buy cheaper. uh we get to buy a dip because usually those stocks recover right after. It's a GDX. It's a rebalance of an index. It has nothing to do with operations. So, we might be able to see in some of those names interesting buying opportunities uh emerge here on Monday. Um let's also take a quick look at the GDXJ. Um let's share this tab here real quick. I put this together um based on the documents that market, what are they called again? Uh market vector actually. It's in Vanac company um put out the other day as well. uh only a couple deletions in the GDX or GDXJ but one prominent addition Royal Gold uh 12 billion market cap company uh always begs the question GDXJ is it really a junior index but you have to keep in mind certain liquidity uh functions need to be fulfilled to be in there and uh I had a quick look with Jet GPT this morning just to take a quick look at the the valuations in uh in the uh GDXJ We have a Fresno in there, $21.5 billion, although they're getting deleted, fortunately. So, let's let's scratch that part. That uh is a is a list from today. Uh Pan-American Silver 15 billion. London Gold 15 billion. Alamos 13 billion. And then we have Evolution Mining at 12 billion. It's not really a junior index, is it? And uh looking at this, I have one more. Let's see if I can find the tab. I thought I had it open here. There it is. Um let's take a look here. just a market cap as percentage of net assets. 55% of stocks are uh over $5 billion in in market cap. So more of a medium cap if you ask me uh index than a junior index. A friend of mine made the make that joke. It should be the GDX medium, not the GDXJ, right? Um so that's that uh on on that front. There's one more um maybe one thing I do want to mention on the GDX rebalance. It used to track against the arc gold box index but that is changing and it is using now the market vector index uh the gold vector index here. Um um now that said uh let me go back to my notes. We have a few more things or one last topic I do want to talk with you about and it's barric gold. Um, as as you recall, I made Barit Gold one of my I didn't make it a top pick, but I mentioned it as a hot stock here on this weekly wrap-up about three weeks ago, and the performance has been absolutely stellar. Let's take a quick look at the chart. I've prepared this one here as well. Um, I mentioned it around August or something. It just episode one or two here. Um, and the stock has moved from about 28.50, let's say $30 to now $41. That's a 33% move. and it has moved this week uh as well. Mark Bristo presented in Denver at the Denver Gold forum and he gave a really positive outlook on the company and uh he highlighted one asset that I didn't have on my radar screen and I don't think the market had it on its radar screen and that's the four mile project in Nevada. um they put out a new PA, an updated PA on that project which was press released uh in co in um conjunction with the the presentation in Colorado Springs and the PA for four mile is astonishing. I have uh the presentation lined up here as well. Um let me just scroll down to the right slide because I I had it on the highlight slide but uh it is insane that project. I'm not sure why I was aware of it. I don't follow the majors too closely. Maybe that's why. But uh four mile is an absolute monster. It is in the in the Cortez gold complex. So it's right next to Cortez and it's right next to Gold Rush uh in the heart of Nevada. And the company just as I said published an updated PA. So it's still earlier days. It's not going to come into production uh anytime soon. Uh first or is projected maybe at the end of 2029. So there is some time but the market appreciate the internal growth profile that Mark Bristo was able to highlight here. Let's take a look at the four mile PA update. Um okay resource 2024 uh fine no nothing too crazy uh 7.8 million ounces but in the presentation Mark Persu said that number will double with the next update which is supposed to happen at the I thought it was in here. I thought it was in here, but they're drilling with 20 rigs here, but it's it's supposed to come by the end of the year, I believe. So, that is supposed to happen. And one thing that really stands out, of course, is the grade even of uh this older resource. 14.1 g per ton is an insane grade. That means margin. You don't have the costs are low. As you can see, cost of sales here, 850 uh to 900 um and the all-in sustaining costs are 650 to 750. But here's the kicker. average annual production could be between 600 and 750,000 ounces. That is an absolute monster. That is a tier one asset, especially since mine life is at 25 years at over 25 years. And the other kicker is four mile this $1.3 billion in annualized four mileita is based on calculations at 2580. We're trading at 3500. We have to get used to a higher gold price environment, folks. Um, we're at 36. We're almost at $3,700 gold. You know what that means? I've done the math here real quick. This is $1.65 billion at $3,500 gold. I don't even spot. So, the the cash flow, the the metrics, the economics are absolutely insane, which why I just want to quickly come back to this chart. This has happened here. And just uh let's show it. Look at look at the monthly. Um Mark Bristo presented here on the 16th. That's when the PA came out and the stock moved over $2. uh which in itself isn't that much but the the mining sector as part of the Fed announcement has just moved sideways and bareric has moved up absolutely brilliant really excited to see that um really excited to see that played out Bareric is a 4% portfolio holding in our in our Kamaxos resource fund I'm really excited to see that because that uh is producing performance now with that said I think um this was a really really good overview of what happened this week I hope you found this ve you found this very informative and educational if you Hit that like and subscribe button. It helps us out tremendously. Let us know what you think of this weekly format. What else should we be covering? Um, it feels like I'm rushing through certain topics. This episode is already 24 25 minutes long. Let me know what we should be discussing. What is important to you um that I should be highlighting because I'm trying to put as much a personal spin on these topics as possible. And I hope it's valuable. So, thanks so much for tuning in. Don't forget to hit the like and subscribe button and uh have a great great weekend.
Why Gold Fans Should Cheer The Fed Move!
Summary
Transcript
The Fed cutting on Wednesday and Jerome Powell pumping the brakes in the press conference were the best thing that could have happened to us in the gold space. Controversial take, isn't it? But doing my homework and having digested now over the last 48 hours what we witnessed on Wednesday, I'm of I'm I'm very convinced that this was the right move for us in the gold space. And with that said, hello and welcome to a weekly wrap-up episode here on the on the Sore Financial YouTube channel. Really appreciate you tuning in. We have lots to talk about this week. Of course, we had the Fed meeting. We had uh uh really really insight. I had a great chat with Lobigra about it. Uh just about a 30 minutes after the the press conference ended, we we did a live session to dissect what Jerome Powell really said and what the market impact was. I'm going to recap some of that and share my insights of what I think the Fed has done and what it means for us in our in our niche here, meaning the gold and silver space, the mining space, and why I think it is the best thing that could have happened to us. I'll I'll elaborate in a few short seconds. As I said, we have a few topics prepared for this weekly wrap-up. We have to talk about the Fed, but also uh gold and silver. We'll take a look at the charts. What does it mean? How have they reacted? We'll look at some other asset classes of course as well. And uh the GDX GDXJ is being rebalanced tonight. What what does that mean? What are the impacts on the mining stocks? Timing of course is always interesting, but it happens twice a year. Nothing unusual about it. Uh update on that as well. There's some other changes happening uh based on what the GDX is based on uh other index it's tracking. And uh Bareric made a big move, big announcement or an updated announcement. It was a big announcement, but it wasn't really on my radar screen. It was a big surprise actually and the market took it as a surprise as well cuz they weren't aware of one of the projects they have in their portfolio and we will take a closer look at what Mark Bristo said at the Denver Gold forum but also take a closer look at that project and why did the market react the way it did as you recall is probably one of my hot stock picks here three weeks ago and the stock has delivered. We'll take a look at the share price here together in a second. But uh before we dive into it, uh let's take a look at the economic calendar together real quick. Uh let's take a look at just just this week. What did we get delivered? Let me bring this on screen and uh let's take a look together real quick. So what happened this week? Not much data like not much meaning okay I'm I'm I'm really underest or not underestimating buting what's the right term? I'm really not putting enough emphasis of course on the Fed meeting. That's what the whole market was concentrated on was focused on was the the rate decision and then of course the press conference by Jerome Powell. Really interesting how the market reacted to that and uh I I'll show you some uh charts in a few short seconds here to just to see what what what happened. Um let's let's take a look at this here. So we got the the Fed interest rate decisions, the FOMC projections. Of course, we got the summary of the economic projections as well, which is really which was interesting, which we'll dive into in in a second as well. And then of course the press conference. But uh before I forget later, and I tend to forget lately at the end, um I want to quick quickly take a look at next week. What can we expect in terms of data? What should we be paying attention to? Um I think as a as a highlight here is definitely the the chairman German Powell uh speaking next Tuesday. Probably we'll get some more color on on the interest rate cut. hopefully we get some more insights um into the inner workings of the Fed and uh who who was that one dot in the dot plot um that said well we're going to have a few more bigger cuts here maybe another percent 100 basis points by the end of the year maybe he'll shed some light on that during that that's why I think there's quite a bit of interest uh for for that speech otherwise um on Thursday we'll get the GDP number uh which which Jerome Pal also mentioned in his speech um that the growth is is is good growth is solid consensus is expecting 3.3% uh US growth uh quarter over-arter which is uh a significant jump of course and we can always debate whether that's paid for by US government dollars and excessive spending over $2 trillion um already this this year um in in terms of deficit so deficit spending definitely pushing growth uh the question is what what will this number be last quarter uh maybe we'll open this here real quick and take a look um it's US GDP growth rate. Uh last quarter it was negative.5%, now forecast goes back to 3.3%. Uh which which is quite bullish here and uh begs the question like why should the Fed cut further just from a pragmatic point of view. Let's uh let's leave it at that. Um so th those are the main points in terms of the economic calendar, personal income. I think uh those are all like those are interesting data points, but they're not earthshattering. They won't move the market unless there is a massive breakout to the downside, I believe. So, I think we can rule that one out. Um, let's take a look at some of the economic projections the Fed has put out as part of uh its its uh release here this week. Uh, so change in in in real GDP. They're expecting GDP to actually increase up to 20 uh 2027. Unemployment rate um that was a bit of a surprise. They're expecting it to take higher official number right now. And that's the official the government the BLS number is 4.3%. Uh the Fed actually expects it to go higher up to 4.5% by the end of the year before it comes back down again. But I didn't hear a explanation like why that should be the case. Like why should the unemployment number come down again magically? Um I don't see a big turnaround. Yeah, maybe in correlation with the economic growth that we're seeing one line above uh 2027 real GDP 1.9% but quite honestly I'm missing indications for that to happen and I don't think a 25 basis point cut warrants any of those projections. So, um, inflation the Fed and Mike Kef from Bloomberg asked actually that and we discussed that with Lobo on on Wednesday as well. But, uh, two years out, it's always 2%. It's always 2% two years out. And I made the joke, it it reminds me of free beer tomorrow that some of the pubs have, uh, uh, hanging on the wall, but tomorrow never arrives. So, it's uh, it's it's very strange. And we will have to figure that one out together. the impact of that as well. But he keeps leaning and I felt like he flip-flopped a little bit on his tariff impact on the inflation. I can't shake that feeling that he he said, "Well, you know, tariffs are inflationary over a longer period of time. Not all the tariffs hit at the same time." And now it felt like, and I went through the script again, he did say it, but then he pedled back in the next sentence yet again, the tariffs are just a onetime impact. And uh we we'll have to figure that one out because the US and China are currently meeting uh in in Spain and uh having their tariff talks. But uh so far I'm not very hopeful that we'll get a resolution to that tariff debate uh yet or anytime soon actually. Um so that that's that part um on on on the Fed. Well, let's take a quick look at how the market reacted to the to the Fed decision um as well. Maybe we'll start with I think the most interesting reaction here was from the bond market. quite honestly. Um I've got the 10-year lined up, but I'd love to show you the 30-year. Let's see if I can find it real quick. Um the US 30-year. Uh let me get Y in there as well. US. There we go. Um cuz it's ticking up. I Everybody expected, well, the Fed is cutting. Mortgage rates will come down, but the mortgage rates are based off and priced off the 30-year bond yields. Uh most of them at least. So, it's the inverse reaction. And we've discussed this here on the channel before as well, like why the market was so fixated on on a Fed cut because even a small cut, as you as you can tell, it's exactly what I expected. The the bond yields are running the other direction cuz maybe the market speculate on a bigger cut and we didn't see it. And the backpaddling by by Powell uh during the press conference didn't help either. Oh, by the way, I wanted to show you I had something queued here and let me show that to you as well. what what I mean. Uh it's sort of the first 30 seconds of of Chairman Powell's press conference here and let me play that for you real quick. >> Good afternoon. My colleagues and I remain squarely focused on achieving our dual mandate goals of maximum employment and stable prices for the benefit of the American people. While the unemployment rate remains low, it has edged up. Job gains have slowed and downside risks to employment have risen. At the same time, inflation has risen recently and remains somewhat elevated. In support of our goals and in light of the shift in the balance of risks, today the Federal Open Market Committee decided to lower our policy interest rate by a quarter percentage point. We also decided to continue to reduce our securities holdings. And that la last part is why everything is moving the other direction. We are continuing QT. Yes, we're easing on one end, but we're keeping it tight on the other. I have yet to find more information on what that really means. The last number I heard was, well, we're we're we're selling off bal off balance sheet like assets here for $5 trillion, $5 billion a month. Um, which is pretty much a non-factor if you look at at the overall balance sheet that the Fed curates here. Um, but that's why like the market reacted very euphorically because yay, Fed Fed cuts plus two more this year. uh or more two two more or two two 25 basis point cuts more. That's why the market reacted so euphorically. But then he said this and uh that's why and that's when the market turned around. Um that's when this happened. Let's take a look at the fiveday because you can probably see it um right around the time the Fed uh sort of talked about. Let's see Thursday. There we go. Um so intraday that's exactly it. So we had the Fed announcement. Great. Three more cuts. Uh the 30-year actually drops a little bit and then it it uh or so the the 30-year jumps up because we're getting the two cuts and then we get the press conference and all of a sudden um this this happens this spike and that's exactly that half sentence that we're continuing to re to sell securities uh on the balance sheet. That's that's uh the whole indicator and that's why I think this is the best thing they could have they could have said coming from the gold angle and I'm going to show you why here on the gold chart and uh let's take a look at the gold chart. I forgot to share the 30-year chart I was pointing at but I think you get my point um when uh talking about this but so let's let's take a look at the gold chart. So year to date the absolute monster performance. Uh let's take a look. But I want to highlight two things. And uh let me see if I can use my rudimentary chart and trend line uh what do you call them? Drawing skills here. But my point is we've been in a sideways like I'm not going to show you anything. I'm not a technical analyst here. But my point is what I wanted to point out. We've been in a sideways movement here from uh what is it? April to like now just recently till like August. We broke out and I think Jerome Powell gave us the opportunity to consolidate and create this exact same pattern again. We will be moving sideways at least for the next 40 days. Um maybe on Tuesday some everything might change if Jerome Powell really changes his tune um from from this press conference which I highly doubt by the way but I think we get the opportunity to consolidate which is very very healthy. I was just talking with an analyst and a head of capital markets at one of the leading banks here in the mining space and he agreed this is very healthy. We need to consolidate. We need to let the stocks catch up to those new valuations. Q3 is almost over. We got 10 more days or 11 more days here in in Q3 and the average dollar gold price in dollars is going to be about $250 $300 higher yet again this quarter. Let the valuations adjust. Let the let everybody catch up and let gold consolidate. If he would have said if Jerome Powell would have said in the press conference we're cutting two more times this year absolutely we are going to do it which is by the way a very dangerous thing to do then we might have we might be trading at 3,800 30 $3,900 per ounce already. Um although gold might have priced in two cuts already. So, but but you get my point. Like we might have overheated. The whole market might have overheated and the euphoria that we all felt in Beaver Creek or at the mining conferences here over the last two weeks um might have actually boiled over which is not good. We want this to be sustainable and Jerome Powell gave us the opportunity to make it sustainable. We'll see what the charts tell us and what other impacts uh we'll we'll see from the geopolitical and just macroeconomic front. But I think the opportunity is perfect to consolidate and then yet again create that nice bull flag and break out that uh that is sort of my forecast quite honestly um with my very limited technical analysis but I do see that sort of happening in the chart and I'm kind of happy that you can already see it a little bit if you look at the monthly at the monthly chart here on on gold as well. Let's let's take a look at silver. um very similar um of course year-to- date fantastic performance. Um perfectly aligned with gold's performance as well. Um but I do like that we get the opportunity. Um silver is a bit more violent was was a bit more violent. Didn't consolidate as much as gold did. It had some catching up to do. If you look at the gold silver ratio, we're still at 86.6. Um it has been coming down, but now we're also seeing it's it's more or less oscillating here. It's uh staying within a range. uh it hasn't really broken up uh broken down or it hasn't broken to the downside. Uh use proper technical terms here. Uh quick look. I'm happy for silver to consolidate over $42. $42 has been an important resistance level and $42 ideally is also the new floor when it comes to that. Um talking about gold, Mike Mlone, uh he's a Bloomberg journalist. He's a senior commodities analyst over at Bloomberg. um has put out uh some some of his analysis and he he says, "Well, the gold red rally is getting scary." He put that out yesterday uh yesterday around noon. He always puts out his commentary on on the commodities market. Um scary to a degree because the move has been absolutely violent. So, I fully agree there. But uh what what I like seeing and what he's been commenting on is that the gold move that 3500 used to be resistance and now it's the new floor offering a lot of support and 4,000 might be his next key resistance target. Isn't that great? But uh please let's let's take our time to get there. I don't want to run there tomorrow. Let valuations of the companies catch up. Let us get another great quarter under our belt. Let's see more record operating cash flows, more free cash flows like we've seen last quarter. It's been amazing to read the quarterly reports. Everybody's been recording uh reporting records. Um what what so ne next thing here um on my agenda is we need to talk about the rebalancing um that we're seeing in the GDX and the GDXJ that's happening tonight. Um I've cued up a quick overview to to share with you. Let me just share this tab here. GDX rebalance. I hope you can see this. Um a lot of additions, weight increases, but also a lot of deletions. um just companies that will be deleted out of the GDX. So, there's going to be quite a bit of reshuffleling happening tonight. And uh let me break it down for you because I had to learn about how the GDX does that as well. Uh so at at market close um order order uh or traders can put in their orders for for trade at close up until like 3:45 p.m. Eastern time, 15 minutes before the close and then they will get matched once the market is closed. Um meaning looking at some of the names that will get deleted like a a Dundy precious metals has been on a fantastic run. It has been consolidating ever since these uh this rebalance has been announced as back in on September 12th. So you can see that the stock price has consolidated some of those stocks but uh or let me rephrase in the past this would have been shocking like this would have destroyed mining or not destroyed I'm using strong terms here strong language but it would have upset the trajectory of many of these companies but uh this this time around keep in mind we're in a bull market we're in a bull market for gold we're in a bull market for mining stocks so these these stocks will likely see a small dip on at at the open on Monday we'll see what the price discovery tells us. I'll see if I can track this over the weekend and try to make it visible on my X feed here at at JR Mining Guy. But I'm not expecting too big of an impact uh to be honest. And uh personally like or from the fund perspective, we kept some cash on the sidelines to buy more of some of the positions, some of the positions we actually hold in the portfolio that will get deleted. And uh I'm excited about it because we get to buy cheaper. uh we get to buy a dip because usually those stocks recover right after. It's a GDX. It's a rebalance of an index. It has nothing to do with operations. So, we might be able to see in some of those names interesting buying opportunities uh emerge here on Monday. Um let's also take a quick look at the GDXJ. Um let's share this tab here real quick. I put this together um based on the documents that market, what are they called again? Uh market vector actually. It's in Vanac company um put out the other day as well. uh only a couple deletions in the GDX or GDXJ but one prominent addition Royal Gold uh 12 billion market cap company uh always begs the question GDXJ is it really a junior index but you have to keep in mind certain liquidity uh functions need to be fulfilled to be in there and uh I had a quick look with Jet GPT this morning just to take a quick look at the the valuations in uh in the uh GDXJ We have a Fresno in there, $21.5 billion, although they're getting deleted, fortunately. So, let's let's scratch that part. That uh is a is a list from today. Uh Pan-American Silver 15 billion. London Gold 15 billion. Alamos 13 billion. And then we have Evolution Mining at 12 billion. It's not really a junior index, is it? And uh looking at this, I have one more. Let's see if I can find the tab. I thought I had it open here. There it is. Um let's take a look here. just a market cap as percentage of net assets. 55% of stocks are uh over $5 billion in in market cap. So more of a medium cap if you ask me uh index than a junior index. A friend of mine made the make that joke. It should be the GDX medium, not the GDXJ, right? Um so that's that uh on on that front. There's one more um maybe one thing I do want to mention on the GDX rebalance. It used to track against the arc gold box index but that is changing and it is using now the market vector index uh the gold vector index here. Um um now that said uh let me go back to my notes. We have a few more things or one last topic I do want to talk with you about and it's barric gold. Um, as as you recall, I made Barit Gold one of my I didn't make it a top pick, but I mentioned it as a hot stock here on this weekly wrap-up about three weeks ago, and the performance has been absolutely stellar. Let's take a quick look at the chart. I've prepared this one here as well. Um, I mentioned it around August or something. It just episode one or two here. Um, and the stock has moved from about 28.50, let's say $30 to now $41. That's a 33% move. and it has moved this week uh as well. Mark Bristo presented in Denver at the Denver Gold forum and he gave a really positive outlook on the company and uh he highlighted one asset that I didn't have on my radar screen and I don't think the market had it on its radar screen and that's the four mile project in Nevada. um they put out a new PA, an updated PA on that project which was press released uh in co in um conjunction with the the presentation in Colorado Springs and the PA for four mile is astonishing. I have uh the presentation lined up here as well. Um let me just scroll down to the right slide because I I had it on the highlight slide but uh it is insane that project. I'm not sure why I was aware of it. I don't follow the majors too closely. Maybe that's why. But uh four mile is an absolute monster. It is in the in the Cortez gold complex. So it's right next to Cortez and it's right next to Gold Rush uh in the heart of Nevada. And the company just as I said published an updated PA. So it's still earlier days. It's not going to come into production uh anytime soon. Uh first or is projected maybe at the end of 2029. So there is some time but the market appreciate the internal growth profile that Mark Bristo was able to highlight here. Let's take a look at the four mile PA update. Um okay resource 2024 uh fine no nothing too crazy uh 7.8 million ounces but in the presentation Mark Persu said that number will double with the next update which is supposed to happen at the I thought it was in here. I thought it was in here, but they're drilling with 20 rigs here, but it's it's supposed to come by the end of the year, I believe. So, that is supposed to happen. And one thing that really stands out, of course, is the grade even of uh this older resource. 14.1 g per ton is an insane grade. That means margin. You don't have the costs are low. As you can see, cost of sales here, 850 uh to 900 um and the all-in sustaining costs are 650 to 750. But here's the kicker. average annual production could be between 600 and 750,000 ounces. That is an absolute monster. That is a tier one asset, especially since mine life is at 25 years at over 25 years. And the other kicker is four mile this $1.3 billion in annualized four mileita is based on calculations at 2580. We're trading at 3500. We have to get used to a higher gold price environment, folks. Um, we're at 36. We're almost at $3,700 gold. You know what that means? I've done the math here real quick. This is $1.65 billion at $3,500 gold. I don't even spot. So, the the cash flow, the the metrics, the economics are absolutely insane, which why I just want to quickly come back to this chart. This has happened here. And just uh let's show it. Look at look at the monthly. Um Mark Bristo presented here on the 16th. That's when the PA came out and the stock moved over $2. uh which in itself isn't that much but the the mining sector as part of the Fed announcement has just moved sideways and bareric has moved up absolutely brilliant really excited to see that um really excited to see that played out Bareric is a 4% portfolio holding in our in our Kamaxos resource fund I'm really excited to see that because that uh is producing performance now with that said I think um this was a really really good overview of what happened this week I hope you found this ve you found this very informative and educational if you Hit that like and subscribe button. It helps us out tremendously. Let us know what you think of this weekly format. What else should we be covering? Um, it feels like I'm rushing through certain topics. This episode is already 24 25 minutes long. Let me know what we should be discussing. What is important to you um that I should be highlighting because I'm trying to put as much a personal spin on these topics as possible. And I hope it's valuable. So, thanks so much for tuning in. Don't forget to hit the like and subscribe button and uh have a great great weekend.