NorthStar BadCharts’ Kevin Wadsworth joins The Insider for a MUST WATCH interview discussing gold, silver, oil, & the markets.
The Gold/Silver Ratio is breaking out to the UPSIDE, while Gold & Silver Miners just placed a significant BREAKDOWN to US Oil.
The IMPLICATIONS might not be what you think…
Key Outcomes
- Gold and silver are in a multi-month correction after becoming historically stretched from their 36-month moving averages; a V-shaped recovery is unlikely, and the correction could last 1-2 years. 123
- Energy and oil are expected to outperform precious metals and miners in the near term, with crude oil potentially reaching $200 - $400 by 2031. 45
- A capital rotation event is looming, which would signal a long-term shift where precious metals outperform the stock market for roughly a decade. 678
- Accumulation levels for long-term positions are suggested at or below $4,000 for gold and $55 for silver, though time remains a key factor. 9
Market Analysis & Forecasts
Precious Metals
- Silver is in a multi-decade cup-and-handle pattern; the recent drop from $121 to ~$54 is part of a necessary correction, not a trend reversal. 310
- Gold reached extreme distance from its 36-month moving average, similar to the 1970s, making a deep correction historically probable. 2
- Long-term targets include gold in the $7,000 - $8,000 range by 2029, with a potential acceleration toward $15,000 - $16,000 in the early 2030s. 11
- Silver targets are around $200 by 2029, with potential for $400 - $500 or more in the early-to-mid 2030s. 12
Energy and Oil
- Crude oil is expected to break above $100 - $115, likely moving rapidly to $140 - $150, with a 75%+ probability of reaching $200 - $250 and a 25-50% probability of $300 - $400 by 2031. 5
- Diesel is projected to potentially rise nearly 300% by 2031, mirroring a similar pattern from the early 2000s. 13
Stock Market & Capital Rotation
- Capital rotation is defined by the gold-to-S&P ratio; a confirmed breakout would suggest a decade of precious metals outperforming stocks. 67
- S&P 500 could potentially “melt up” to 8,000+ as long as it stays above a key green support line; a break below a red line would signal a capital rotation event and a possible “lost decade” for stocks. 14
- Market crash expectations include a probable 30-50% drop in the S&P 500 during a rotation event, with the Nasdaq potentially suffering more. 815
Investment Strategy
Miners vs. Energy
- Miners (GDX, GDXJ, SIL, SILJ) are currently underperforming energy and oil; broad-based miner baskets are risky while energy prices soar. 516
- Selective mining is recommended: price individual miners against oil (e.g., WPM/Oil) to find those that can withstand rising energy costs. 17
Accumulation Approach
- Stackers/long-term investors can use large drawdowns to accumulate; buying gold at/below $4,000 and silver at/below $55 is considered reasonable. 9
- Traders should use support/resistance lines and risk management; exiting into weakness (e.g., around $90 for silver) can avoid deep drawdowns and opportunity cost. 10
Open Questions
- Timing: The exact duration and depth of the current precious metals correction remain uncertain, though 1-2 years is the historical norm. 13
- Severity: Whether a capital rotation event leads to a moderate 30-50% stock market drop or a more extreme 1929-style depression is unknown. 8
Gold-Silver Ratio: A rising wedge pattern is bearish, but a false breakout to the upside followed by a reversal would be highly bullish for both metals. 618
Forecasts, Alerts, & Trade Reccommendations from Kevin & Patrick at NorthStar BadCharts:
https://northstarbadcharts.com/
