Precious metals base out for future breakout
The guest argued that the recent pullback in gold, silver, and mining stocks is a healthy consolidation phase that is rebuilding necessary bearish sentiment before a major leg higher.
The argument
Despite short-term weakness, the guest believes silver is building the right side of a cup-and-handle pattern and could double over the next year. He noted that mining stocks recently doubled out of a ten-year base, and historically, such structural commodity moves do not end after just one leg up.
The thesis, stress-tested
✓ What validates it
- ✓Silver breaking and holding above the $80 to $88 level on SLV
- ✓GDX reversing upward and showing relative strength over physical bullion
- ✓First Majestic (AG) sustaining gains post-earnings and executing its announced buyback
▸ Risks discussed
- ▸Short-term price action remains weak and below key moving averages
- ▸High volatility in commodities can shake out latecomers or over-allocated investors
Hear it yourself
"So, your model essentially starts correct me if I'm saying this incorrectly, but but starts with a regime. And it basically says, okay. Let's look at the environment, that the investing world is in right now, and then let's figure out how to position for that environment. If I've been following your work correctly and I do follow it closely, we are now in a reflation regime. Correct? That is correct. Absolutely. If I can share my slides, I'll just, you know, quickly go through You can. I'll yeah. Exactly. That that that that's the part everybody wants you to get to right away anyway, so let's do it. Absolutely. So, we use our global macro risk matrix, Adam, to what we now cast, what we call the market regime."
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