Phil Streible on Yahoo Finance discusses Gold and Silver Rally: Navigating Economic Storms - Blue Line Futures

Transcript

Host:

Be cautious navigating this landscape we want to bring in Philip Streible. He’s from Blue Line Futures chief Market Strategist to joining us. Now, Philip, it’s great to see you again. So here we are with gold prices are right around 2100. Now it is important to point out just in terms of when you adjusted for inflation, gold actually said, higher highs when you look back to the 1980s. And some of the prices that we have seen in the past will take into account where we are today gold just above 2100. Phillip, do you think there’s more room to the upside?

Phil:
Oh, I think so we got a perfect storm brewing in the gold market with opportunities and silver. I mean, we’re $150 above the February lows, you’ve got us you’re in European inflation data that’s been weakening in the prospects of the Fed, the ECB and the Bank of England, all to have interest rate cuts are rising. So in May, we’re expecting about a 23% chance that the Fed will cut rates you go out to June, it’s about a 65% chance. But I really think kind of the details of this gold rally because if you look when we took off, it was basically Thursday near the closes when gold futures really started to get to our legs. And I think that there’s another regional bank crisis that’s kind of lingering in the background. Since that close on Thursday, New York Bank Corp has been down 38%. And I think that the the reality is, is that you’re seeing the short covering because of the fact that if you do have some kind of bank failures, some kind of regional bank risk, you’re gonna see it pull forward those interest rate cut expectations by the Fed, and a lot of making those cuts a little bit sooner.

Host;

And in that case, we’ll also be asked to keep tabs on any incoming economic data, is there one particular prints that has a more outsized impact on gold, as it translates to the rate cuts probability?

Phil:
Well, of course, it’s going to be the jobs number on Friday, if we see any number that’s below 200,000. I think that that will expedite, you know, the prospects of the interest rate cut, the last number was about 353,000. So blew the socks off. That’s when we saw prices come down. But I know that I believe that some of these seasonal factors have come, you know, out of the market here as far as the job market. I think that there’s significant underinvestment also in the gold market right now, if you look at the ETFs, it’s been just nothing but a series of outflows on that market. Even with prices going up. We saw about $155 million in ETF outflows out of the GLD market. Perhaps those were people that bought that recent record high that occurred on a Sunday night into a Monday, and they’ve been holding on to that now we’re seeing that rotation out of gold and into Bitcoin, which is attracting about a billion dollars a week in ETF inflows.

Host:
And that’s what I was just about to ask you fill up? How much of that gold outflows in the ETFs are we seeing now flow into digital gold?

Phil:

Yeah, I mean, you know, the reality is, is that I think that there’s a place for both physical assets and also digital assets in people’s portfolios, I think that will help them against, you know, a macroeconomic backdrop here that is starting to waffle a bit. And then also it will help with the purchasing power going forward. So I think it’s a play for both portfolios. If you look at when the GLD started about 2004, over the course of the next seven years, those ETF inflows that went into that asset class took gold from $400 An ounce on up to a record high of about 1850 an ounce. That’s why we believe that with the way the ETF is setting up for Bitcoin, we could easily see $100,000 Bitcoin at the end of the year, and perhaps two or three years out, $250,000.

Host:
Phil, what do you think the price of gold looks like a year out?

Phil:
Well, I think we’re gonna be easily back up at 2500. If you go since 1990, within the first 30 days of the first interest rate cut, gold futures, on average have had a rally of about 6%. So if you go 6% From here, that’s going to be about another $150 Higher. So I think 2500 is a realistic target. The key catalysts on the gold market is the timing, the pace and the depth of the interest rate cuts, the Fed has really two options. They go slower and sooner start in March, or they gotta go faster and later starting in June. And if they do that, that’s where things can really get a bit haywire on the gold market. And I think that again, with the Gold Silver ratio sitting around 8990, that you could see a really aggressive move on silver higher
 

Host:

since you mentioned silver what’s going on with the level of resistance, there’s this thick area as you define it in resistance that’s taking place within silver.

Phil:

Well, silver, the range on the upside where we’ve run where we started the pump, the brakes has really been 24 to 26. Remember, China is one of the largest consumers of not only silver, but also copper. And with solar stocks under significant pressure. They’re one of the most heavily shorted sectors in the market. I think that There are some headwinds for the silver market. But like any balloon being held underneath water, eventually when it comes to the surface and explodes significantly higher so we do believe that we captured some key levels of resistance just in the last two days. Silver’s gone through the 50 day moving average 2332 also above the 200 day moving average at 2402. I would say your your line in the sand is going to be that 50 day if we go back below it prices could be just rolling over and this was nothing more than a head fake. On the gold market, your critical level supports 2100 below that’s going to be the 50 day moving average at 2055.

Host

So we gotta go. Is there one metal that you’re tracking that perhaps is annex to this boom that we’ve seen in semiconductor demand?

Phil:
Copper market could easily take off to the upside we could see for dollar even 450 copper if China starts doing some stimulus measures.

Host:
Phillip Streible who is the blue line futures chief Market Strategist, Thanks so much for taking the time here.

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