Transcription
Hello everyone, welcome to Bald Guy Money. And last week I told you all that the next two to three weeks were going to be absolutely critical for gold and silver, as gold had broken below its 200-day moving average, and I expected silver to follow. Which is something we have historically seen before large moves up, as you can see in these examples here, both past and more recent, showing how large moves up for gold and silver have commonly come after temporarily breaking below that 200, 100-day average price level and then moving swiftly back above it.
Now, with one week behind us, it's fair to say that things are developing somewhat in line with the base case scenario that I talked about on Sunday, because even though gold broke below my lower area of price support at $4,150 an ounce, we did see buyers step in, mainly on Thursday, as indicated by the wicks, or the thin lines at the bottom of these weekly candles, pushing prices back up. With silver holding the levels I shared on Sunday after breaking below the 200-day moving average and then reclaiming it at the end of the week, with price getting pushed back up to $68 an ounce, allowing silver to finish actually positive on the week, with the weekly candle looking a lot like a bottoming tail, which is one that sometimes indicates a trend reversal.
That said, before we celebrate, there are a few things we have to look at as we enter the second critical week for gold and silver, and that's what I want to cover in this video. Starting with the current technical setups for metals, are we getting closer to a turnaround, or is $3,500 gold and $50 silver in the cards? Once that's covered, we will talk about the latest fundamentals, which are the real drivers in this market long term. We will talk about how they are impacting price, focusing on what drove prices up at the end of this past week, as well as what we need to see for that momentum to continue. And to finish, we will cover the end of the bull cycle for gold and silver. I have prepared a clear chart for everyone mapping out the phases I expect to see as we move up, hit a top, and then pull back. I will tell you when I expect the bull market to pick up again after that cycle top pause, what I plan on doing with my mining stock profits, and talk a bit about the end of the Bald Guy Money channel. So, don't miss that.
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So, jumping in, we start with the technicals for gold and silver on the backdrop of a lot of dissent or disagreement amongst the top internet technical analysts, with some saying this past week was likely the bottom for gold and silver, or at least close to it, and others like Gareth Soloway still insisting we must come all the way back to $3,500 an ounce for gold and $50 an ounce for silver. Now, if we're being perfectly honest, taking a look at the charts and putting records on the line, including my own, as we broke below my pullback zone last week, and I'll say more about that shortly. The truth is, there is no rule that says we must come back to the breakout or consolidation level, or the scene of the crime, as some like to call it. And I'm not trying to be rude or throw shade at anyone here, but I say this because I keep hearing people repeat it, even in my own Discord group, as if it's a rule that's written in stone. Now, could it happen this time around? Sure. And I don't think it will, but anything is possible. That said, we've heard this before. We heard it when gold broke historic resistance above $2,000 an ounce, and it never went back there. We heard it once again when gold broke $2,800 an ounce. In fact, we were told it would go back there as recently as June of last year, and it never did. And as the old saying goes, fool me once, shame on you; fool me twice, or even three times, shame on me. Which is why I say to buy on a schedule and buy these dips harder instead of waiting for the perfect entry point.
Now, of course, nobody's record is perfectly spotless, including my own, and I had a moment last week where gold temporarily broke below what I communicated would likely be the maximum downside floor. And I own that 100%. That said, we did bounce back and finish the week back above that level, closing the week for gold above $4,200 an ounce. But as things stand today, on a technical basis, we remain in what I call the danger zone, with a pullback to the October lows around $3,900 an ounce still in the cards, at least until we can reclaim $4,250, or even better yet, $4,300 an ounce. With a serious reversal sign for gold being when we finally reclaim the 200-day moving average, which currently stands at $4,450 an ounce, and eventually break above $4,840 an ounce, which would reverse the damage done to gold technically that we've seen since April. So, keep those figures in mind over the next few weeks.
Now, moving on to silver. The situation for silver is a bit different, as we bounced off the upper layer of my danger zone this past week, briefly giving up the 200-day moving average, which I told you all to expect in last Sunday's video, and then swiftly reclaiming it on Friday. And although this is a bullish development, keeping my base case scenario intact, we're not out of the woods yet until gold confirms higher levels and gets out of its danger zone, because, as I've been insisting for a while now, gold will lead the next move up, just as it did following its 2024 breakout. So, watch for support at the March lows for silver to hold around $61 an ounce, with an outside possibility of breaking into the high $50s if gold's reversal fails, which again, is not my base case scenario. So, anybody out there who thinks I may be flip-flopping, I'm not. That's not my base case scenario. I'm simply presenting the situation as it stands today. But what I want to say here is, look for silver to break above $77 an ounce and hold that level as a real sign that the short-term bearish trend is being reversed. And I would look for that to happen as we finish the month of June moving into early July.
Now, with that covered, I want to say that we should treat those levels that I just shared as signposts confirming either strength or weakness for precious metals over the short term, based on the fundamental developments we see, because a lot of technical guys will say the charts are telling us this, and the charts are telling us that. And I understand that there is information to be found in the charts. Don't get me wrong, I use them and I talk about them here on the channel, but the charts themselves cannot predict if the latest news of a peace deal between the US and Iran is real. The charts can't predict what Kevin Walsh is going to say on Wednesday at the Federal Reserve meeting. And if we learned anything this past week, it was the main source of pressure on gold and silver prices is coming from the war with Iran. Because after a slight pullback in metals prices, driven by news that the European Central Bank had officially increased its target interest rate for the first time since 2023, the market shrugged it off and moved significantly higher on news that strikes against Iran's Carg Island were being cancelled, and that a final peace deal was going to be signed, which, for the first time, was actually confirmed by the Iranian side. And although I still need to see it before I can believe it, and I wouldn't take any action based on this development alone, if true and confirmed this coming week, it means that Kevin Walsh, who just replaced Jerome Powell as chairman of the Federal Reserve, can use his platform on Wednesday, June 17th, which is when we get the next Federal Reserve interest rate decision, to make his case that the rising inflation figures we've been seeing are a temporary result of higher oil prices due to the war with Iran, and core inflation, which strips out energy and food costs, actually rose less than expected in the month of May, giving the Federal Reserve room to hold rates where they are for now, and then pursue rate cuts later on in the year, which is presumably what Kevin Worsh was brought in to do. Meaning the rate hike that we see priced into the market today, that is weighing heavily on precious metals prices, will have to be priced out of the market, acting as a buoy for gold and silver, which should push them up. And I know it's a lot of moving pieces, and I can't say with absolute certainty if that's what we're going to see this week or not. So I will do a midweek video on June 17th to update you all on the status of what's happening. But I will say that whether it happens now or later is ultimately inconsequential, because despite short-term volatility for metals, three things remain absolutely true. Government spending around the world is not slowing down. And the debt load requires lower interest rates to even maintain an illusion of sustainability. It's why we saw cuts instituted in 2024 despite inflation not fully being tamed. And central banks fully understand this fact, which is the main driver of why they've turned to gold as their preferred reserve asset over the US dollar or any other fiat currency linked government debt. And that means higher precious metals prices are not just a probability, but an inevitability. And although my base case scenarios and expectations for gold and silver remain completely unchanged, and I want to be very clear about that in this video, I want to point out that if we learned anything from Michael Bur and the famous movie The Big Short, I'm sure most of you out there have seen it, it's that it's better to be early on these matters than it is to be late. Especially if it comes to this situation. And I say that for people who only discovered gold and silver in the last 12 months, to let you know that giving up now would be a mistake.
Now, just before we discuss the end of the metals bull cycle using a map I've created to illustrate what I think it will look like, I want to remind you all that owning land is another way to protect yourself from inflation and currency debasement, while also being a very useful asset for preppers. I have recently purchased land myself, and if you've been wanting to get some land for yourself but have had trouble getting started, please remember that channel partner Land of Land can help you get started easily and affordably. They have great properties with many starting right around $1,000 with their weekly auctions, often offering up fantastic deals on lots all across America. Buying is made easy, and they even accept credit cards for payment for people looking to earn points on their purchase. So check them out at landofland.com or call them at the number on the screen. And remember that by using the code bald guy, you get $300 off of your purchase to buy something the Federal Reserve cannot print.
So, moving on to this video's viewer question. And please remember, I select one viewer question to appear in every single video I do. Don't be shy. Leave your question below in the comments section right now, and you never know, it may appear in my next video. And this week, I've selected three questions and comments to appear in the video, as they all relate to something I talked about last week, which was my promise to announce when I think the cycle top for metals is in, as well as my plans to shut down my channel after that happens. And these questions come from Air It Out, Nimble Nate, and Anthony RDE, who all want to know what I mean by a temporary cycle top. If metals will pull back after that happens, what happens for metals after the cycle top and that pullback? Will there be another wave up? And what I plan to do with the money I take out of the mining stocks, as they have concerns over the US dollar and its stability.
So, to start, what do I mean by a temporary cycle top? Well, I put together this image, which should give you a rough idea of how I see the metals bull market progressing, drawn on a real gold price chart going all the way back to 2000. Now, the green line that you see after the final red candle shows what I expect to happen once we finally recover from this pullback and consolidation period, which I think we are very close to the end of, by the way. And as you can see, I expect to see three waves up. The first taking us back to $5,600 an ounce for gold, which I expect to see this year still. Nothing has changed. The second bringing us to the low $6,000s, which I expect to happen next year, followed by a final blow-off phase taking us to between $7,500 and $7,800 an ounce for gold. And that's somewhere in 2028, likely the middle of 2028, but could happen a little sooner or a little later, depending on the speed of rate cuts and what happens with the stock market.
Now, moving over to this image, and the red line that I've added here shows more or less what I think a pullback after the cycle top will look like, taking us back to early resistance levels between $5,600 and $6,500 per ounce for gold, kind of like what we saw after the 2011 highs, where gold pulled back to just above the 2008 highs. And since I've compared the January pullback to 2008 so many times, I can certainly see that level being in the high $5,000s for the simple reason that both gold and silver will get a little ahead of their skis, just like they did in 2011. The interest rate cutting cycle will be done by then, will already likely be after the stock market correction, and metals will take a pause as money rotates back into other parts of the market. And I think that will last for about two to four years. And this is just a rough timeline, please take it with a grain of salt. But after that correction, likely by 2031, or maybe as late as 2032, I expect to see both gold and silver take off again. And that's when I really expect gold to hit $10,000 an ounce for the first time. And I'm sorry if that's too conservative for many of you out there, but that's how I've seen it and communicated it here on the channel for a few years now, with the trigger for that next wave up for precious metals being the eventual implosion of the US dollar debt-based system, which I don't think is going to happen in this decade. In fact, I think they're able to kick the can down the road just a bit longer. But once we reach 2031 and 2032, the consequences of unfunded liabilities, which are promises to pay people money in the future that are not being saved for today, will begin to materialize as Social Security, which will be paying out an estimated $2.1 trillion in benefits annually by 2032, will run out of its savings cushion in line with this graphic here. At which time, the United States will either have to cut benefits to Social Security recipients by about 25%, or will have to print and borrow the difference, with many other countries around the world, especially in Europe and East Asia, facing the exact same issues, all coalescing around the same moment due to aging populations.
Now, with those expectations covered, I want to be clear on my plan to scale out of the mining stocks, because, as I've said, I will not be selling the physical precious metals. Those are for old age and really for emergency only. But for those of you who are planning to sell your physical precious metals, you can use this, of course, as a road map on how to do so. The only thing I'll say is, do it at your own peril. It's not something I would do personally, but I will sell my mining stocks, and that will happen within the black circle you see on the screen now, just above $6,000 an ounce. And I will scale out over time, because my approach is, you average in as things are moving up, and you average out as you're starting to top out, because you'll never be able to nail the exact top. With my approach being getting mostly out of the mining stocks as we approach $7,000 an ounce for gold, but starting as we crack above $6,000 an ounce. And as I've said before, I will be looking at the mining stocks very carefully as a leading indicator as this topping process plays out, because they put in a clear topping pattern before the 2011 metals top. And that's another reason why I think it's good to start a bit early, as the risk of holding too long simply outweighs any upside benefits, especially once you see again those miners start topping out, even in the face of higher metals prices.
Now, the question remains, what will I do with the money once I've sold out of these stocks? Because it is true, the situation with the dollar is not great. It is being replaced with gold as the preferred reserve asset for central banks around the world, and it's happening for a good reason. But that doesn't mean it's going to entirely disappear tomorrow, or that physical gold and silver are going to replace it as the preferred medium of exchange once we experience a major market event associated with the US dollar. And that's probably a deeper conversation for another video. But my approach on what to do here is simple, because I showed you this great chart in last week's video showing you all that the top for the metals market isn't in yet, because metals haven't experienced a breakout versus stocks yet. And as a reminder, gold and silver top only after the stock market has corrected. And you see a major rotation of money out of riskier paper assets into commodities and other physical, tangible, hard assets like gold, silver, oil, and copper. All of which had huge runs in the 2000s as the stock market languished. Now, if you understand that, then you know the opposite is also true. When the stock market usually breaks out and starts its run after the top for metals is in, just like what we saw in the early 2010s, when the S&P 500 finally took out the 2007 high, coinciding almost precisely with the top in the metals market. So, apart from buying some more real estate, which is where most of my net worth is, as some of you may already know, I will take advantage of this relationship and swing back into mainstream stocks, which I don't hold at all at the moment, and I'll determine which ones those are when that day comes, at which point, as I said last week, is when I will shut down the YouTube channel. But as I've demonstrated in this video, that's not realistically going to happen until 2028, after which I just want to spend more time doing other things, likely at the cottage I'm building on the piece of land that I bought, and take things a little less seriously, as running this type of channel is a huge responsibility that I don't take lightly. But until then, I'm happy to keep making these videos to show you all the importance of buying and holding metals for the long term, as we ride this hard asset wave up, which is something that won't change even once I'm done here on YouTube.
So, with that said, please look out for my midweek video on June 17th. That is going to be an absolutely crucial video, as we dive into what Kevin Walsh says in his first meeting as Federal Reserve chair since he's replaced Jerome Powell at the helm of the Federal Reserve. We're also going to see whether or not that peace deal between the United States and Iran actually went through, how the market has reacted, and what to expect moving forward based on both that potential peace deal, as well as Kevin W's remarks as chairman of the Federal Reserve. So, look out for that again on June 17th, following Kevin W's speech at the Federal Reserve. That said, I want to wish you all a fantastic week ahead. Please remember to take care of yourselves and take care of each other. And see you all in Wednesday's video.