Gold & Gold Stock Fundamentals Will Be Strongest in 2025

Summary

In this edition of Macro Mondays, Jordan discusses the strengthening fundamentals for gold and gold stocks, suggesting a potential significant rise in the coming months. He analyzes the yield curve, noting its steepening as a key indicator, and predicts a recession signal. Jordan emphasizes gold's performance post-Fed rate cuts and its bullish trend against commodities and various stock indices. He concludes that gold stocks are poised for a strong performance against inflation, setting the stage for a 'sweet spot' in the gold market.

Takeaways

• 📅 The video was recorded on Monday, September 9th, 2024.
• 📈 Jordan discusses the strengthening fundamentals for gold and gold stocks, predicting a significant shift in 3 to 6 months.
• 📊 The key development is the yield spread between the 10-year and 2-year treasury yields, which has inverted for a record amount of time.
• 🔍 The yield curve's steepening is a critical indicator, with the potential to signal a recession if it continues to steepen aggressively.
• 💹 Jordan anticipates that the yield curve will steepen, influenced by possible Federal Reserve rate cuts and a firming of the 10-year yield.
• 🏆 Gold divided by the S&P 500 is at 0.46, and a significant move upwards could indicate a substantial rise in gold prices.
• 📊 Gold is outperforming against various markets, including commodities, which is positive for mining margins.
• 📈 Gold against the stock market is setting up for a bullish pattern, with potential breakouts above resistance levels.
• 💼 The stock market appears tired in nominal terms, while gold is positioned to continue its upward trend.
• 🌟 A breakout in gold against the stock market could lead to a significant increase in gold and precious metals, especially if tech stocks falter.

Q & A

What is the main topic of discussion in Jordan's video?

The main topic of discussion is the strengthening fundamentals for both gold and gold stocks, and the potential for gold stocks to become very strong in the coming 3 to 6 months.

What key economic indicator is Jordan focusing on in the video?

Jordan is focusing on the yield spread between the 10-year and 2-year treasury yields, which is a key indicator for predicting economic recessions and the performance of gold stocks.

What is the significance of the yield curve being inverted?

An inverted yield curve, where short-term interest rates are higher than long-term rates, is often seen as a predictor of a potential economic recession.

How does Jordan interpret the current state of the yield curve?

Jordan interprets the current state of the yield curve as a 'red alert' situation, suggesting that it has gone positive and may continue to steepen, signaling a possible recession.

What does Jordan predict regarding the Federal Reserve's actions in the future?

Jordan predicts that the Federal Reserve will likely cut interest rates in the future, which could contribute to the steepening of the yield curve.

What is the current ratio of gold to the S&P 500, and what does Jordan suggest it indicates?

The current ratio of gold to the S&P 500 is 0.46. Jordan suggests that if this ratio breaks above 0.50, it could signal a significant upward move for gold and precious metals.

How does Jordan view the performance of gold against commodities?

Jordan views the performance of gold against commodities as 'super bullish,' indicating a strong breakout and a positive sign for mining margins.

What does Jordan suggest about the relationship between gold and the stock market?

Jordan suggests that gold is currently underperforming against the stock market, but he anticipates a breakout where gold will outperform, which would be a positive sign for precious metals.

What is the significance of gold outperforming tech stocks according to Jordan?

According to Jordan, gold outperforming tech stocks, which have been holding the market up, is a good sign for precious metals and could indicate a significant shift in market dynamics.

What is Jordan's outlook for gold stocks in the next 6 to 18 months?

Jordan's outlook for gold stocks in the next 6 to 18 months is positive, suggesting that they are setting up for a 'real sweet spot' fundamentally due to favorable conditions such as potential rate cuts and inflation.