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Monthly Wrap Up

Top Trading Strategies

David Brady's trading strategies


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Watch Craig Hemke and David Brady wrap up the volatile month of April in the precious metals market. From discussing price movements to analyzing market trends and offering insights into trading strategies, this episode covers it all. Plus, learn why physical gold and silver are essential for protecting against economic uncertainties.

Topics Discussed:

  • Volatility in April's precious metals market
  • Importance of physical precious metals as a hedge against economic uncertainty
  • Elliott wave analysis and trading signals
  • Factors driving gold and silver prices, including loss of confidence in the dollar and global geopolitical tensions
  • Potential scenarios for the future, including stock market crashes and Federal Reserve interventions
  • Strategies for accumulating precious metals and navigating market fluctuations
  • Long-term outlook for gold and silver prices and the role of fiat currency


Announcer: You're listening to Sprott Money's "Monthly Wrap Up," with Craig Hemke.

Craig: Well, hello again from Sprott Money, and sprottmoney.com. It's time to wrap up the month of April, and what a volatile month it has been. I'm your host, Craig Hemke. Joining us to bring the month of April to a close is my good friend David Brady. You will recognize David as an expert in the precious metals and in trading. He is a writer here at Sprott Money, cranks out an article every week. You can find that on the Sprott Money home page by hitting the nav bar, scrolling down, you'll see "Insights," and you can find David's most recent post, and other posts that he's written in the past. Anyway, it's great to have him join us. David, thank you for spending some time with me.

David: Oh, it's great to shoot the breeze with you about gold and silver and so forth. Great to be here again.

Craig: There's a lot to be shot, that's for sure. It's been a heck of a month. Wanna remind everybody, I mean, we talk about price, and where it's moving, and where it's going, and that, you know, that kind of comes and goes the ups and the downs, but what should always be on your mind is physical precious metal. In my mind, nothing else can protect you against this endgame of monetary madness, and the exploding debts and deficits, and the money that's gotta be printed to service all that. Physical gold, physical silver are your true harbor in the storm. Always keep Sprott Money in mind. Go to sprottmoney.com. Give them a call at 888-861-0775. Let them help you out. Great deals on metal. Great deals on storage.

David, thank you again for joining me. Just for people that don't know, like I mentioned, this article you write here at the sprottmoney.com site. Where are some other places people can find your work?

David: Oh, I just started The FIPEST Report on Substack. You can find it at fipestreport.substack.com. I'm also, obviously, on Twitter @GlobalProTrader, and I'm an adviser to the 4779 Fund in New York, which is predominantly a gold, silver, and miners fund, dedicated to that sector, because we think that's going to take off going forward.

Craig: Well, yeah. What's that fund called again, just so people can look it up?

David: 4779. It's, on the periodic table, gold and silver.

Craig: Huh. Oh, that's very creative. Did you come up with that yourself?

David: No, I didn't. I'm not that smart.

Craig: Let the marketing team do that. All right, my friend. Let's dive right in. Again, and I wanna encourage everybody to follow you on Twitter too, because you share a lot of good information every day on Twitter, especially for anybody that thinks of themself as an active trader. Having David's insights on your shoulder every time you open up Twitter is very helpful.

It has been a volatile month. Let's start there, and then I wanna ask you more big-picture stuff. Price ran up as the month began, we got some highs north of $2400 in gold, got all the way back to $29 again in silver, and then it ran into the same brick wall that it ran into a couple of years ago. We're now kind of what seems to be in a pullback. Are we in an extended pullback? We in a short one? What are your trading signals telling you?

David: I'm looking at the Elliott waves in particular, because the data has been, like, such as sentiment, extremely bullish, the positioning, the banks are short, the funds are long. The dollar has been going up, but gold and silver have been going up anyway. The correlation has broken down to some degree. But finally we got a pullback. Actually, I think we're coming to the close of it. I think that we broke $2320 today, again, and my worst case for gold is $2250. That's a key level on the way up, and I think it's gonna be a key level on the way down. Similarly, in silver, I had $27 as support. That's been broken. And I think that $26 now is the level to look at, a nice, round Number. But it could get as low as $25.50, but again, I think we're near the end of the pullback, reverse, or whatever you wanna call it. Next stop, it won't be straight up. It's, we're climbing the stairs. We're not going up the elevator. I expect to see the peak in this rally at $3000 in gold. And in silver, I'm looking for somewhere between $30 and $32. And then we'll get another big pullback, likely to, at least in silver, $26 to $25. And then, see ya. "See ya time," as I call it.

Craig: See ya up, or see ya down?

David: See ya time to the upside. It's just gone. Stratosphere, exit, bye. You know, that's my two cents, based on the Elliott Waves. And the trend is, until the trend is broken, which there's no signs of that yet, I just see it keep going and going, much like it did from 2000 to 2011, it's 1974 to 1980. We're in the same paradigm, in my opinion. So, this pullback's still underway. We've broken down some good key support levels, but I think it's running out of steam now. It's about it's gonna turn back up again very soon. Now, we can get into the fundamentals and so forth in a minute, but I'll let you [crosstalk 00:05:33]

Craig: Well, let's do that. I get asked this all the time. You know, sometimes I'm in your chair, being interviewed. Sometimes I'm interviewing. So, I collect questions that people have asked me, and I thought, "Well, I'm gonna ask other people that." So, I've got my ideas as to what has driven gold the first four months of this year, because it's caught so many people by surprise. You know, I mean, we had everybody was over the rainbow with rate cut expectations at the end of last year. We've gone from seven or eight possible rate cuts to maybe one. The yield on the 10-year note's gone up 50 basis points, the dollar index has gone from 101 to 107.

David: Mm-hmm.

Craig: Normally...normally, in a situation like that, you'd see the precious metals under pressure, but yet here gold's up 10% year to date, if not more. What do you think is driving it, David?

David: Well, there's a whole bunch of things, but I want to address the one you just mentioned, which is key. The fact is that the dollar did go from 101 to 107. And yet, gold and silver kept going up. It's a rhetorical question, but why would that happen? Me, I believe, and have said this before, I believe that people are losing confidence in the dollar, U.S. policies, U.S. assets. And you can even see that in the bonds. And the main problem is the deficits and the debt. That's the core, and everything just, you know, goes downhill from there. So, the fact that the dollar went from 101 to 107, and yet gold was setting new highs, and so was silver, at least recent bias, that was profound to me. I believe there's a loss of confidence. And let's, you know, step back from the markets. Just look around you. Look at all the people who are buying emergency food, guns, ammo, off-grid properties. You know, but what's happening in gold and silver is just an extension of that, in my opinion.

And I don't think it's just in the U.S. or Canada. Even, look what's going on in China. They got lines around the block, trying to get in to buy gold and silver. Specifically gold, but also silver. India's buying silver like it's going out of fashion. So, I think that's one of the primary drivers. There's a loss of confidence. It's only starting, but it's gonna get worse. And then you look at what happened in, what, it certainly helped, and it's been ongoing, as, you know, the wars are going on around the world, specifically the most recent one being in Gaza and so forth. And then, if you wanna get back to the Fed, we were talking about the Fed and rate cuts. They kept pushing it out and pushing it out and pushing it out. And I'm a contrarian trader. I like to go against the herd, like James Dines did. And what I see is that they're kind of pushing it out. Now they're getting worried about inflation again and so forth. And then the markets come off, gold and silver, that's part of the reason why gold and silver are coming off now. And you're seeing, you know, the issues in the Middle East and in Ukraine are not hitting the headlines as much in the past couple of weeks.

I go against the herd. Everybody's, like, going, "Okay. Some of the drivers are being taken away." That's the time you buy. It's like Warren Buffett is most known for saying it, but we all know it now, but you sell when everybody else is buying, and you buy when there's blood on the streets. So, that's the extremity. I'm saying that all those things are easing off, which does, "Oh, here comes the buy option, the buy opportunity." And on top of that, you've got the banking stress. We saw that last in last March. But First Republic just went bust. The lending program from the Fed has been terminated. That looks like a canary in the coal mine.

Craig: Yeah.

David: And then you see what's happened to the stock market. We've come off the all-time highs. We went below 5000. What do they know? So, I think there are [inaudible 00:09:36] don't get me started on the insider selling. Zuckerberg, Thiel, Gates, they're all selling out. Pelosi. They're all selling out. Why? Why are they all dumping stock? Jamie Dimon as well. Because they know. They're the insiders. They know what's going on. So, when you put all of those factors together, the Fed is pushing out rate cuts, and everybody's, like, getting a little more sanguine about what's going on in gold and silver. For me, the risk is that we get a stock market crash, of 20% to 30% correction initially. We're in an election year. They can't let it dump to, you know, 50%, unless they want to get rid of Biden. And then the Fed will do its usual thing. After saying that they're pushing out rate cuts, they're, you know, keep, you know, the QT going, they'll do a complete 180 again, and go straight to rate cuts, and then go to QE. And I haven't even mentioned yield curve control. Have you looked at the 10-year yield recently? That's not normal. It's like you can draw a straight line through the peaks. And when we see it in gold and silver all the time, to see it in the 10-year, I mean, it's incredible. Just take the, you know, the most recent chart, the four-hour chart, captures it perfectly.

So, I believe that they are gonna cut rates this year. You know, I'm going against the herd. Everybody's go, "Only one rate cut, maybe zero." I see inflation going up, but if the stock market dumps, you know, the Fed's gonna have to respond.

Craig: Yeah, yeah.

David: And then they get it back, you know, to where it was, or maybe slightly higher, in a wave B, before the election. Whoever gets elected, gets elected, and then, a few months after the election, they're gonna pull it down. Well, that's just going to be gasoline thrown on the fire. On top of all the other things I just mentioned, if the Fed actually does do a, pull another 180, much like they did in March 2020, the most recent example, and they throw trillions at this, where does gold go then? Is it $5000? Is it $10,000?

Craig: Right. Right.

David: And silver? So, I try not to get bogged down in the day-to-day, you know, like, minuscule moves. I got a big picture in mind. $3000 is the target I have next, and then there's a big pullback. Maybe it's synonymous with a stock market crash. Then when the Fed rolls in, off it goes again.

Craig: That would be how that $3000 happens, you know, throw that log on the fire. And that's how that, if people go, "Oh, that's never gonna get there." Well, that's how it happens. David, another thing that would turn the short term would be a recognized top in the dollar index. Again, it's not... I always tell people it's not that they're completely discorrelated, you know, one goes up, the other goes down. It's just either a headwind or a tailwind on a daily basis. You wrote, last week, for Sprott Money, and I'd encourage everybody to go check it out. Again, just go to the "Insights" tab on the sprottmoney.com page, and scroll down. You'll see David wrote an article last week about what looks to be a short-term top coming in the dollar index. Please tell everybody a little bit about your thinking there. And then maybe, hey, throw in a little plug for what your next article might be, too.

David: Yeah, I think, if you look back, the DXY reached, the dollar index, reached 114. And then we went down to 100, slightly below 100, and then we went back up to 107. That's a classic top. A down, B up, and then the next leg's down. And I mentioned some of the fundamental factors that I'm looking at too. You know, the pushing back of the rate cuts should be beneficial, but you have to look at it relative to other countries...

Craig: Right.

David: ...and if you look at Dollar/Yen, that tells you all you need to know. I believe that's going into it. That's going to a new higher high, over 160, and then it's gonna dump. And the dollar's gonna tank in that regard. The euro's gonna regain its footing. And I believe that either it has peaked, at give or take 107, or we're going up to 107, 107.30-ish, maybe. But different routes, same destination. I expect it to drop down to around 100, 101, you get a nice a little pop, and then down to 94 to 92. Now, to your point, day-to-day correlations mean nothing. But when you get the dollar index drop from 107, just play along with me, from 107 down to 94 to 92, you don't think that's gonna be beneficial for metals and miners?

Craig: Right.

David: Now, you say, "Well, yeah, that may not happen." Well, yeah. I could be wrong, but I don't think so. I think there's a general move away from the dollar. You see what's going on with BRICS and so forth, but I like to use tools. And the Elliott waves in particular, when you're dealing with trends, strong trends, are very helpful. That is screaming to me that the dollar's going south. And then when you have all of the other factors lining up, like the banking stresses starting to come back again, the Fed will cut rates, in my opinion. The war has gone quiet for now. What happens as the next thing takes up? What if China invades Taiwan tomorrow? There are just too many factors in play that benefit gold and silver. And these pullbacks are just a buying opportunity as far as I'm concerned.

And I wanna summarize my forecast one last time. We went up to the highs in gold and silver recently. We've come off. As I said, I think $2250, $26, $25.50 in silver will be the bottom. And they're all going to go up above those previous highs. That'll be the top of wave 1. And then we'll get a correction again, another big one, that everybody will go, "Oh, forget it," because they just experienced a recent one. But this is the fake one. [inaudible 00:15:55] second one comes down. They go, "Forget it. This thing's just wandering up and down. I'm getting tired of it." And then off it goes. "See ya." That's my two cents, right or wrong.

Craig: Well, and people think, "Oh, how does that happen?" Well, think of, again, you get that initial rally, like you said, and then maybe you get this global liquidity crisis, equity crash, you know, kind of like early 2008, gold went to $1000, and then went to $700, because everybody, you sold whatever had a bid.

David: Yep.

Craig: And that included gold futures, so you could certainly see... Would that kind of factor into how you think the wave pattern plays out, something like that?

David: Yeah. I mean, look, the fundamentals are lining up. You look what's happening in commercial real estate, and how that's impacting the banks. You see... I know a lot of people are in denial about housing, but I like, again, data. Just look up FRED. Look to the median home sales price. It's falling faster than in 2008. And then you're seeing the, what is it, the FHA? Delinquencies on mortgages. Soaring. You're seeing credit card balances soar. You're seeing credit card costs go through the roof, and you're, because of those two factors, you're seeing credit card delinquencies. People don't have money. And then you see, you know, the governments around the world spending like drunken sailors, and then they jack up the taxes to cover their spending. And that only squeezes not just the middle class, everybody. You know? So there's less money to spend. And that's why you see Rolex is getting into trouble. You know, their sales are dropping like a lead balloon. iPhone sales are dropping like a lead balloon.

This, it's all connected. Yeah. I'm citing technical tools because that's the market telling me what it thinks. But it all, [inaudible 00:17:40] this fundamental data that supports it. So, my point is that all of that negative data is eventually going to weigh on the banking system, which also weighs on the stock market, and when those turn down, there's only one savior. That's the Fed, and they're gonna do their little trick again. And it'll work for a little bit. [inaudible 00:18:02] it's gonna run out of steam, because confidence is being lost. Now, Jim Rickards used to say this all the time. It's all about confidence, confidence. Okay, well, what does confidence mean, you know? You know, I'm not a shy guy. What's confidence mean?

Well, confidence is the loss in confidence in the policies that support the bond market, the dollar, and so forth. If you are...if this was me, going out getting credit cards, and spending, buying all this nonsense stuff, and going on trips and yadda, yadda, and they get another credit card, another credit card. Eventually, somebody's gonna show up and go, "Hey, you gotta pay the pipe." That's the U.S. government right now. That's the Canadian government right now. That's every European government right now. It's, if you go back to COVID, you can look up for a headline where the IMF stressed that every government should be spending like drunken sailors. And they didn't use that term, but they did. And here we are.

Craig: And here we are.

David: Yes. And the only way out of it is either default or inflate all that debt away.

Craig: Right.

David: We both know what they're gonna do.

Craig: Right.

Craig: So, and I guess, if we could just kind of wrap up with this, because it goes back to my central thesis. It goes back to what the sponsor does here. They sell precious metal. You know, it's fun to watch the price. It's fun to play around in the mining sector, all that stuff, right? I mean, it's all things that help us pass the time while this is all going on. But I would imagine you kind of believe, as I do, that gold and silver are your safe harbor, and at this point, everybody else is starting to catch up, so you just, make sure you're buying the dips, and accumulating as prudently and effectively as you can.

David: Absolutely. And I didn't even mention the word stagflation or hyperstagflation.

Craig: Right, right.

David: Because when the economy's going down, and they're printing money like drunken sailors, 1970s. And I really liked your first comment when we came on, Craig, was, you mentioned physical metals. If you were going to be in this space, you build a core physical metal portion of your portfolio. In other words, don't start buying, like, you know, penny stock, penny miners. You buy physical gold, you buy physical silver, you stick it in a drawer, and that's, you know, the basis of your portfolio. Then go off and look at the miners.

Craig: Right, right.

David: Not the opposite.

Craig: Right.

David: You know, this get-rich scheme. You're gonna get hosed. And these will stand the test of time. Because they take emotion out of the game. Because they're sitting aside. You forgot them. They're in a drawer somewhere. And as this market does this, marches its way higher, you'll look at it a year later, two years later, and go, "Whoa." Whereas you're too inclined with the miners to get in, to get out, you know, [crosstalk 00:20:55]

Craig: Right.

David: [inaudible 00:20:56] Build a base first, and then add the miners on.

Craig: Excellent words of wisdom, from a guy who's clearly a grizzled veteran. I mean, look at that beard he's got going.

David: My wife likes it. What can I say?

Craig: What everybody doesn't know is that, you know, eight years in the precious metals has aged David from 20 to...he's only 28. And look at what it's done to him, for crying out loud. No, anyway, I tease you. Obviously...

David: I'm heading towards 60, buddy. That's where I'm heading. I think [crosstalk 00:21:27] looks good.

Craig: I tease everybody, because I... But there is some truth to trading and focusing on the precious metals is like dog years. You know, it ages you three or four years at a time, because it's so counterintuitive most of the time, and, you know, the hair that isn't just falling out is getting pulled out...

David: Yes.

Craig: ...watching this stuff. But you've made excellent points. Again, just encourage everybody to think big picture, you know, not to get caught up with your emotions. Understand the math is the math. I mean, this is kind of a terminal phase of a debt-based system. The math isn't turning around anytime soon. David, I, just lastly, as I, you know, plug your work here at Sprott Money, anything else you'll be keeping your eye on, as we barrel now into the summertime, ahead of the U.S. election, everything else? What else should people keeping their eyes on as well?

David: Well, a stock market crash or correction, a big correction, is one to look at. Any further problems in the banking sector is gonna be another signal of trouble going forward. And all of this bad news is good news for us, because, much like in 2008, and in March 2020, when the proverbial hits the fan, guess who shows up? The lender of last resort, and they answer all our prayers with regard to gold and silver, because it's just going to be throwing gasoline on the fire.

Craig: Yeah.

David: All the fundamentals, all the technicals, Elliott waves, blah, blah, blah, all of it is pointing in this direction. All it needs is a catalyst. And when the Fed comes in, you know, I'm gonna just enjoy watching it. I'll have my bags of popcorn ready, you know, for months. You know, it's coming. And I'm saying, and I want to say this last thing I'll say is, again, this rally is in its infancy. And when I say that, we came from $1618 to the recent highs. It wasn't, like, from $2100. It wasn't $2000. It was $1618 was the bottom in wave 4. We're going up to a peak now, and I believe it's $3000, and then we're gonna get another big drawback. That'll be your last buying opportunity, because after that, it's wave 3, and it's gone. It's, like, I'm thinking $5000, $10,000 in gold. Silver, I don't know, $400, $600. I mean, some ridiculous number. Now, I'm not talking about next year or two years. This is gonna take... They like to drag it out. But those are the targets that I'm seeing on the upside. Because imagine what's happening to fiat currency at the same time. It's been printed into oblivion.

Craig: Mm-hmm. Mm-hmm. I can't argue with any of that. You're absolutely spot on. It's just a function of, I don't wanna say remaining patient, because we've been patient for a long time. I guess controlling your emotions is a better way to put it, and not get caught up in the day-to-day. And you do a great job of that.

David: Yes. Physical silver and gold. Sprott Money.

Craig: Right. Exactly.

David: Yeah, I'm telling you. That's it. That's...because you take emotion out of it, you stick it in a vault, you bury it in the ground, you do whatever you want with it. Leave it there. Don't touch it. Let it collect dust. And watch what happens. You know, two years, three to five years from now.

Craig: Like the Bitcoin people say, you know? Where they're just holding on for dear life. You know, like you said, your physical silver, you watch the price move, but you're not gonna, like, grab a handful of it and go to the local coin shop on a daily basis. That's, that illiquidity of it is really your best friend at a time like this.

David: Exactly, exactly.

Craig: So, well, my friend, it's always so much fun to visit with you. I look forward every week to the articles you post, usually sometime later in the week, Thursday or Friday, they'll show up at Sprott Money, and I encourage everybody to keep that in mind. Follow David on Twitter. Check him out in his other sources, his new Substack, and hopefully we'll have you back on again soon, Dave. It's always so much fun to get caught up with you.

David: Yeah. Thanks, Craig. And I love your work on the COT data and so forth, and the shenanigans that's going there. You know, you're my go-to for that.

Craig: Well, that's why...

David: That's true. I'm not buttering you up. It's actually fact.

Craig: Well, I appreciate that. But that's hard-earned experience as well. People would never know that I'm only 25. So, look at all these... Ah, anyway. Again, hey, thank...I wanna thank everybody for watching. Please shoot out a, hit the like button. That always helps, on whatever channel you're watching. Hit subscribe, so you don't miss any content when it comes out. And May is gonna be another busy month. There may be a special guest or two that you'll wanna make sure you get notified if and when said special guest shows up. I'll just leave it at that. So, hit the subscribe button, so that you don't miss any of the content that Sprott Money brings to you over the course of the next month.

David, thank you. It's time to sign off. We wish you all well. And again, keep an eye on this channel for more great content from Sprott Money as the month of May begins.

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About the Author

Our Ask The Expert interviewer Craig Hemke began his career in financial services in 1990 but retired in 2008 to focus on family and entrepreneurial opportunities.

Since 2010, he has been the editor and publisher of the TF Metals Report found at TFMetalsReport.com, an online community for precious metal investors.

*The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.

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