Gold: The Next Big Move transcript

Hey everyone, and thanks for jumping back into the heavy metal verse. Today, we're going to talk about gold, and we're going to be discussing the next big move. If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up, and also to make sure you get your ticket to the first ITC conference, Investing Through the Cycles conference, taking place in November. Link is in the description below or the pinned comment.

Obviously, gold will be a theme of the conference, and hopefully, I will see you guys there. Ticket prices are going up on September 1st, uh probably the evening of September 1st, just to give you a little bit more time, but they are going to be going up. So, if you are planning on coming, make sure you go ahead and get your ticket. Let's go ahead and jump in. So, we've talked a lot about gold on the channel, really going all the way back to 2019, right?

I mean, some of the first videos I did were were about gold all the way back then. And, you know, my general assessment of of gold is that we have had, you know, we had sort of an initial move way back in the day, right? I mean, talking about 2016, 2017, that feels like back in the day now. Um and then we had sort of a consolidation period through 2022. And then another move up, and I think we're just in a sort of a second consolidation period in 2026.

I am still a believer in the actual top for gold is still ahead of us. That is what I think, and I'll I'll talk a little bit about like what would invalidate that view, but that is my base case right now. I think that geopolitical uncertainty is only going to go up. Uh central banks around the world are only going to likely continue to add gold uh to, you know, to to what they're buying. And I also think, frankly, that, you know, at the end of the day, when push comes to shove, they will print, and I think things like gold will also benefit from that.

So, I want to talk about though the short term. Because if you guys go back and look at the videos we did on gold earlier in the year, well, and and especially last year, we said to expect a correction in gold starting in early 2026, right? Early 2026. You can see that gold rallied into about February. Now, it's down a decent amount, right? Like it dropped about 30%, but 30% drops by gold, they're normal. I mean, in fact, they're not even all that bad compared to some of the drops that we've previously had.

If you were to look at the gold bull market from the 2000s, during the '08 crisis, gold dropped about 33 and 1/2%. If you go back even further to the bull market we had in the 1970s going into the 1980s, there was a a drawdown in gold of almost 50%. So, a 30% drop really isn't that archaic of a drop to then say that you can't have a continuation of the bull market. I think the bull market will likely continue, but we are in a in a pullback at the current time.

So, let me let me go through what I think's happening, all right? Gold has had a pullback, right? Throughout a lot of 2026. This low that gold just put in in the summer, you should know on average, that is when in terms of time, that is when gold often finds a low in midterm years. So, if you were to look at the year-to-date ROI of gold in midterm years, this is 2026. Now, what we're going to do is we're going to look at the average of all prior midterm years going back to 19 the 1970s.

And what you'll notice is that on average, gold tends to start the year off strong. It then finds a period of weakness going into the summer, but on average gold bottoms in early July, right? Like late June, early July timeframe. And that's exactly where gold found a low, and it started moving up. Now, what do I think's happening, right? What do I think? We've talked about this. I think that cuz you might you might notice that gold actually had a pullback the last couple of weeks.

This is actually very much in line with how gold normally plays out in a midterm years. Like there's there's usually a low in the summer, a rally out of it, and then a one pullback, one final pullback before then theoretically gold would then run again. Okay? Now, if you were to look at just the last two midterm years, 2022 and 2018, you can see that gold did not find its like yearly low until like late September, October timeframe.

So, I do want to leave some room for that outcome, but that's not necessarily like my base case right now. I what I'm looking for is for gold to print likely a higher low in like late September, early October. Could be a lower low, but I I I think that sort of the rationale for saying a lower low would just be saying, "Well, it has to follow 2018 and 2022." But it doesn't, right? I mean, if you were to look at other bull markets, notably the one from 1974, you can see that gold started off strong, it faded, bottomed in the summer, moved up, correction in the late September, early October, and it was at new all-time highs by by the holidays, right?

So, by by the sort of the end of the year. Now, look at the chart. Like look at gold. Look at 1974 cuz this is an example we actually compared it to back in like a year ago, essentially. Um look at 1974. Gold had a big move up into March in March and April. Had, by the way, from that high almost a 30% drop. Rallied off the low about 20% a little less than 20% and then it had a pullback into mid-September where it formed a higher low and then went to a higher high.

So if you go look at gold here in um 2026, right? About a 30% drop. How far of a rally off the low? About 20%. We're now getting that pullback. I think what I'd be looking for here I'd be looking for gold to likely print a higher low. Okay? I I think it'll be a higher low. If it's a lower low, it does not mean that the bull market is necessarily over. Okay? It does not. I know there's the the main discussion right now is to whether this top right here in January is like the top or if if we can get another move.

Now, there's a lot of people that think it's the secular top, right? Like that it'll be the top for the next 20 to 30 years. I'm not in that camp admittedly, but my invalidation on that would be if gold is not really breaking out by about mid-2027, then I would at that point have to reconsider my position. I think about mid-2027 at the latest would be how long it should take for gold to start putting in new all-time highs.

And I I think it could happen as early as later this year, especially if we want to follow the 1974 playbook. Now, you might be asking like what what's the like what's the reason for you know for a potential gold pullback, right? Like does it have to happen? Well, what I think is the most likely reason for a pullback in gold is a very brief research resurgence in the US dollar currency index, the dollar, the DXY, the Dixie, if you will.

And where that comes from, if you look at presidential return um or sorry, president presidential term return paths and if you look at the dollar right? If you pull up the dollar and and we simply look at how the dollar has performed under Trump's second term compared to his first term, it's been almost a carbon copy and it can and we we followed this. I mean, in fact, in 2025, I said expect the dollar to go down for a year, form a base and start begrudgingly going higher into the midterm year.

And you know, this pullback that we've had while a lot of people might equate it to the reason for the pullback would be what Bessent said or you know, whatever, we also had a similar pullback around this time in Trump's first term in the in the first time he had he went through a midterm year. And what you'll notice is that there was one where there was another final push by the dollar to the upside before the end of the year.

Now, I think the reason why the dollar will get that surge back up to the upside before the end of the year is because we are very likely going to see one or two rate cuts or sorry, rate hikes before the end of the year. You can already see the market's pricing in a couple of rate hikes potentially before the end of the year. I think that's going to provide some strength to the dollar before this year is over. I think that's what's going to have gold remaining weak in the very, very short term and I when I say very, very short term, I just mean for like, you know, two to four weeks.

I'm not talking about, you know, very long here. I think it's going to be short-lived weakness. And and then from there, I think gold will get another move up. Now, if you look at the bull market support band for gold, remember, this is based on monthly moving averages, not weekly. You can see that it it didn't even quite tag its bull market support band. But that's normal. Like through a lot of the prior bull markets that gold's been in, a lot of times it it doesn't always tag it.

Like sometimes it'll come close, but it it doesn't always have to tag it before continuing up. You can see that happened throughout the 2000s. And then also if you look closely through the 1970s, there were plenty of times where it would get really, really close to tagging it, but it wouldn't quite get there. So, I I think that gold from here will likely in the short term experience weakness going into like mid-September or maybe even mid-October at the latest.

It'll likely be caused by the dollar going up. But I think that gold will likely print a higher low in like mid-September or mid-October, like a a higher low. And then from there go back up. If it prints a lower low, I still wouldn't give up on the idea, right? Like yes, it's possible that you have a slightly lower low. Um but I I wouldn't I wouldn't make that sort of like the baseline expectation. I suppose the lower low would be like if it were to be back testing this trend line or something, right?

Like maybe in that case, you you come back down and you sweep the low from June. And and in that case, you would actually be following 2018 and 2022 where the low occurs in September-October. So, I I don't want to make the case that it can't happen. What I would say is this, I'd say I'd put about a uh maybe about a 65% chance that it's a higher low and about a 35% chance that it's a lower low. But regardless of what it is, I I think that gold would have a strong bounce of that low going into the end of the year.

That is my assessment of what gold is likely going to do. Uh I know some of you guys have been on this journey with me with gold for a long time. So, let's see if this can if if this does in fact play out. And and if it does, then I think we're looking at another good year for gold in 2027. If you look at If we look at the year-to-date ROI, I mean, we obviously spend a lot of time looking at it in the midterm year cuz that's what we're in.

But, if you actually look at gold in um uh in Sorry, let me pull this back up. If you look at This is not the right one. If you look at gold in pre-having years, right? Or I guess you could call it a a pre-election year, uh if you will. Um normally, it it actually does tend to do pretty well in uh in pre-election years. So, I guess we just re-updated all this stuff, so it's not I guess we'll just go with this one for now.

But, I mean, basically the idea, right, is if you look at at 2026, you can see this move. Now, if you look at it in 2023, gold generally trended up. If you look at it in, say, 2019, generally trended up. 2015, it was slightly down. Uh but, 2011 was up. 2007 was up. 2003 was up, right? I mean, a lot of the pre-election years, gold does generally trend higher. So, let's see if that actually plays out. I I think it likely will, uh but, you got to form the low first.

Uh likely a higher low, potentially a lower low in mid-September to mid-October. And from there, I think there's a good chance gold will be back in business. If you guys like the content, make sure you subscribe to the channel, give the video a thumbs up. And as a reminder, if you would like to talk about this stuff in person, uh you can get your ticket to the first Investing Through the Cycles Conference taking place in Miami.

Main conference day will be November 21st. We'll have some stuff. Um especially on the day before that. So, make sure you guys get your ticket. We're about to raise prices here on September 1st. So, if you are wanting to go, go ahead and get your ticket. Thank you guys for being here. I'll see you next time. Bye.