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 [Music] I'm Charlotte McLoud with investing news.com and here today with me is Omar Alis who writes the gold charts are us newsletter thank you so much for being here great to see you great to see you and thank you Charlotte yeah really good to be finally connecting with you we're talking before we turn the camera on about how I've seen you around conferences for years so really good to finally connect I thought just since it's our first time speaking I know many of our audience members will probably be

familiar with you but if you could just start by giving a brief overview of your background and the work that you do absolutely well um I currently write a letter called gold chart to us we analyze the price movement of bonds stocks and equities broadly speaking Commodities broadly speaking and we specialize in in in Gold like our letter you know letter says the gold Tri to us I've been writing this letter for 13 years and um I'm a corporate lawyer from background and you know especially in

corporate finance and so which allows me to understand some of what's happening in the business Miners and you know from from that perspective and we try to analyze the uh macroeconomic Trends and try to make some sense out of them and and and and try to establish primary trends to uh provide investors and Traders a you know a good path as to how they can be basing their their investment strategies and building up their portfolios okay really great overview there so let's jump in and start talking

about what's going on with gold right now so just before as I was getting ready for this interview I was reading a recent piece that you wrote where you're talking about the seven-year cycle in gold and if I understand correctly essentially it's saying that every every seven or eight years gold hits a low then we set up for a move higher so I was hoping you could situate Us in terms of where we're at in that cycle right now because I think that would be really helpful for investors absolutely yeah that

definitely gold is cyclical I think like many people understand and see it this way um but you know we have in a at Gold TR TR us we have a an identifying long long-term trends and looking at primary Trends and always trying to identify you know where is the primary movement towards and we have identified like you correctly say a seven sevene cycle 7 to8 year cycle it's a seven-year cycle when when it's in a bull market gold and it's a eight-year cycle when it's in a bare Market that's why it's seven or eight

but but basically if you if you if you take a the price of gold since uh 1970 okay which was around the time that the the market was open and and uh and it was start to be trading freely okay every seven years every seven to eight years you see that basically gold forms that form the major bottom okay and and and that doesn't necessarily mean that the the future bottom is going to be lower okay than the previous bottom it's just a major bottom that usually precedes a major than a up move and um

if you if you actually you know go 7 to eight years you will you know easily find you know these these Mega loads within within the past you know 40 plus years and more recently more recently we had um one of the most major lows and I think it's easy to to identify you know was uh back in 20089 and another one was in 2015 you know 2015 was a major though if you remember I'm sure that many of the ERS are going to remember that you know back then uh you know gold had peaked in 2011 2012 went into a you know a very uh

rude you know bare Market where it was it was tough for many you know and uh it all you know retraced lots and it actually bottomed in December of 2015 know a coincidentally seven years be you know after the previous low 20089 and the other major low after that of course was last year 2022 and you know it's not a coincidence in Charlotte that uh you know this this uh this major low 20 2022 also coincided with um with a Breakout in uh in longer term US Treasury yields and we'll get that in a minute I don't want

to maybe neily confuse the situation but it is it it they do correlate that it is important and because it validates Gold's Gold's move but what what this cycle is telling us is that not only that gold goes it reaches a bottom every seven years but after it reaches a bottom it goes on to reach a 11year and 2011 year uptrend and to reach a high so in every bottom preds an 11year move so for example the last 11year move that we saw a gold pick in in in uh 2020 and that was a when from the from the low of

2008 2009 the low of 2015 we we believe that it's going to basically the 11e cycle on the top of that no will peak in 2026 2027 um and uh you know and then you know talking forther read of the 11 year after 2022 that's already like you know maybe a little too far out but you know 2032 2034 and 33 right and but um but but but what this is but what this suggests okay and if you're looking at the chart and you know and if you're looking at the major lows it you know what this is telling us

is that basically the major low from now to 2026 2027 we've already seen and it was last year now that doesn't mean that those lows cannot be retested you know it just means that it's a very unlikely for them to be broken okay so you know like actually you know for this the the the current down move right before this up move okay we believe that gold was actually going to fall a little bit below the 1800 level and probably even retest those 2022 loads and you know to our surprise it didn't it actually held

which tells us that you know overall in the bigger scheme of things gold is very strong okay and uh it's it's a it's it's a very strong cyclical moment and a mega and uh you know so know of course and you know it's not you know again you know like things won't you know gold is that won't rise in a linear way 2026 2027 is not going to just you know H make that jump like that there will be pullbacks there will be secondary reactions you know and you know I am a Trader as well so I I I don't believe

that you just buy anytime blindly you know you know I I like to buy I like the contrarian view I like to buy when it when everybody's selling and I like to sell when everybody's buying and so you know um but but if you're a longer term investor you know and you're not really looking at you know time and you're not like me paying attention too much as as to you know where the price of gold is right now of course it's a great time to buy it's a great time to buy because

over the next you know few years you are going to see higher gold even though we might get a pull back here and there okay I think that gives this a really good overview of the big picture for gold and I was going to next hone in on kind of what's going on right now because it's kind of is an interesting day for goal because we did have it past the 2,000 per ounce part I don't know if it's still there I think it might have pulled back a little or maybe it's still there but we're hovering at least right

around that level and this is a point that people really get excited about we've seen gold at this level Above This level earlier this year but it's pulled back so at this point is this the time do you think where we get here and we stay here or or how does that look to you given everything that you've been talking about well look and and actually you know a gold does have a you know a major resistance at around 207 uh 207 5 that was basically you know you know it just broadly speaking that was the peak in

2020 and that was the peak in I believe this was in 20 22 and um you know and right now you know like we could see um that level R tested on the current up move that we're that we're experiencing today you know a big level you know to be able to go and retest that level was to break the $2,000 level which you know today I believe it yeah like you're saying just it broke above it earlier in the day and then I think it closed above 2,000 anyway uh but you know like uh there is you know you can tell that

there's price resistance at that level as well so but but but going back to that triple top that triple top resistance you know that gold at 2075 you know with gold major tops at that those levels you know it's a strong resistance you know and and and and technically speaking you know um price-wise you know like uh you know gold will have to break above that level you know to to to to rise higher obviously okay and uh that resistance will gold break it out on this up move or maybe not may maybe it reaches 2075

maybe it pulls back to below you know to around the 1900 level before it makes another up you know that is very possible can it break it on this up move you know like given what's happening around the world Charlotte you know I I can see how it couldn't you you know so so I I am overall very bullish for gold and you know and and it will break you know to guys it's a question of will it happen in over the next month or two or will it happen in you know six to nine months but I think it will

happen right okay so we've got that resistance as you said at 2075 we don't know if we're going to break it this time but it's going to happen in the future could you just briefly outline you know where's where's the support for gold right now where are you seeing that well I have a like a short-term support at 1925 so you know like you know know when if gold you know if you see gold around 1950 1925 that would have been a great time you know that's a good time to start buying there's more of an

intermediate support around 1,800 and then if you go down to like say that 2022 low you know which that would be like I guess a mega support if you know if gold would come to crash you know which again I don't see a fundamental for that but you know but you still have to keep all the options open that's around 1,700 1675 and now I don't really expect gold to fall that far but that is a major level that we keep an eye on H but for now 1925 I think is probably the more relevant level to be looking

at okay so I think this gives us a good idea what's going on with the gold price right now so if we pull back and we look at some of these macro factors that you've started alluding to one thing I wanted to go over with you was you the work you've done looking at interest rates so in the piece I was reading that you did you're talking about a big shift in in interest rates into a higher for longer kind of period and a much higher for longer period than people probably want to hear about I think you're

looking at 30 to 40 years of this higher rate environment so I was hoping you could break that down I think that's not probably news that people want to hear because we're already hurting from from these higher rates well yeah you know there but there's a couple of things you know Charlotte you know I think you know a lot of people are hurting it because of you know how the 500 basis points in one year you know so I think you know from zero to 500 basis points or you know 5% you I think that is very intense and I

think really that's what maybe is hurting people you have to you have to you have to realize like or you try to understand that over history you know over thousands of years of History you know probably the average rate of return is about 5% you know just at the past 10 15 years you know since financial crisis you know we we've been used to a Zer environment right and you know and and anything that is above that seems like a lot but this major cycle that that that you're asking about you know like if you

this is one of the major major charts that I look at that will Define my primary Trend investing in anything not only in Gold this appli for pretty much everything and and I'll go into it in second you know basically the chart that I look at is the yield on a 30-year US Treasury wond okay so basically the the yield on a US treasury bond it for me tracks very well long-term inflation expectations the bonds the the yields rise you know of course as bonds sell and they basically are trying to It

capture the rise of inflation longer term expectations of inflation okay and so the this this treasury this this the the the treasury market you know the longer term treasury market moves in secular shifts secular shifts of like you were saying 30 to 40 years you know this means that a whole you know from bottom to Peak will take around 30 40 years and same from Peak the bottom so the last time the last Mega the the last Mega Market and and treasuries you know actually wasn't was the past 40 years you know

back in 1981 the 30-year yield longer term us treasuries peaked at around 15% or a little bit higher and that was in 1981 and basically 40 years later you know went to zero you know and then you know it starting to pick up and you know and of course that not in a linear way but you know like downtrending you know and uh over over the course of time in 200 in in 22 the the the treasury yield the 30-year treasury coincidentally broke above you know a a a mega resistance a 40 year resistance and it has held above

it for the past year so it kept on Rising this year it kept on Rising and you know basically that Mega shift that breakout basically tells me that the 40-year bond market the bull bull market and bonds or you know bare market and and Treasury and bond yields okay it came to an end it came to an end in 2022 and you know some sometimes you know Paul you know the deflationist you know people say well you know are you saying it's this time different you know those are the most the four most dangerous words in you know that you can

ever say I like well if you're and then what my response is Char is if you're comparing to the past 40 years yes this time is different but if you're comparing to the past 100 years this time is not different you know this has happened before and you know if you look at a at 100 you know you know a long longterm chart of the US Treasury yield you will see that from 1940 to 1980 yields Rose it was a secular bare Market in us treasuries a secular bull market in treasury yields that were went from

the very lows you know in the single low single digits and it picked at 15% and then at that moment it started falling it broke below this trend you know and then it went on a secular bare Market until it bottom in 20 and you know throughout the 2010s and until it it reached a full bottom in 2022 and it broke out from that bottom I mean 2020 and then it broke out in 2022 from that bottom so on on that on that premise you know if you look at the chart well we've just started a new bll market and

treasury yields it's going to last 30 to 40 years by historic standards again yes is different from the past 40 years but it's not different compared to the past 100 years it's actually very much the same this has been there before now it might not be convenient like you say people are scared you know a lot of a lot of businesses a lot of you know for example like people business is looking for f for funding to you know to fund new ideas and things you know it's very different when you get a loan at a zero

rate interest and you know you speculate on a business venture and it's very different if you have to pay you know a seven eight% rate on that then you you might you might not be so risk you know so happy to to take risk because it's it's really going to cost you it doesn't come that you know the risk doesn't come free that and you know I you know I feel that maybe what happens is moving forward you know wants people you know and and start to get more used to the fact that you know this is going to be a

higher for longer which you know I think like especially in the past several months three to six months I've seen a change in the narrative like in like in news and you know in in in financial media and you know in mainstream Financial media you know it's everybody's now talking more higher for longer becoming more mainstream you know and uh and I think that is just people coming to terms with the idea that you know like this a reality and you know like what's what's going to happen most

likely you know like yes maybe those you know like the ultra speculative investor maybe you know that's going to scale down a it okay because now you know it's a cost money is not so easily available okay and um you know so those are going to be realities things are going to be be better planned out you know and not only that Charlotte something very interesting happens you know like you know most people have been used to short you know the past 5 10 years short-term Investments they want a short return I

want to make I want to make my money this year I don't want to wait 10 years I want now I don't know what's going to happen in 10 years there's been such an uncertainty over the long term regarding you know all these economic phenomena that that people have just been investors and you know people have been just you know they just don't want to to go there and but that's going to change that's going to change because now you know we have higher financing costs now that we have you know we will need you

know more time to be able to recuperate our investments to be able to you know turn a profit and to be able to do the good business and I think it's just getting used to it and you know people will get used to it 30 40 years people will get used to right right so it's just about you know how far back you pull to see the larger picture really interesting so one thing I want to ask you about so hire for longer interest rates that's that's very clear how you've laid it out typically though you

know and this is not necessarily true but typically we hear higher interest rates are not good for gold and yet so we're going into this higher interest rate period where also it looks like we're going to have a higher gold price so I wondered if you could unpack that explain what's going on there well you know it's actually very interesting because you know gold and and and uh and bonds you know have not know I guess the reason for the question is because you know from the moment from the year 2000

to you know 2020 2022 actually and gold and bonds have moved and treasuries have moved together on a safe bit okay so they both moved very much together you know there's a chart it's very you know very very well correlated and and for and for many years you know our investment you know on our letter was you know oh you know like these are the safe havens they're going up that gold is going up but that has not always been the case you know before 20120 you know gold actually moved with yields not with the

bond okay so for example like from from 1980 to the year 2000 when there was that decline in in yields there was a huge bare Market market for for gold even though Bonds were doing well you know it was a it was a it was a huge market for gold and gold fell together with treasury yields it was only until 2000 okay that actually that shifted and then gold started to move with treasuries on a safe havment bid given I think you know the the the the the money printing phenomena because really it started during the re Greenspan era you

know and it really got more intensified you know like to power right you know but but it really that's where it started and I believe that the ships back then and gold you know moving away from from from from from Trading parallel with uh with the yield and then moving with the bond is because all of a sudden I believe that you know first gold got to be way too cheap you know and then it also you know it it it started to trade more of a as a safe hav you know and not too much with inflation

but traditionally gold moves with inflation and interest rates move with inflation you know inflation Rises interest rates catch up gold Rises as well so not all always on the same day not always on the same breath you know and not always it doesn't always happen you know many times especially if we have a violent move upward the knee-jerk reaction is to see gold you know maybe even you know pull back or scale and and there's a reason for that too you know and and that reason is called real rates

okay there is such thing as a real rate and what is a real rate basic when you get a a a a bond a bond yield and you you know reduce the uh the CPI or it could be the PCD an inflation indicator okay from the U and then it what that number comes out to if it's a positive it will tend to affect gold if it's positive around 3% you know it tends to affect gold negatively but you know like remember that uh for for for a long time those yields have been negative until until more recently but you know they've

been for the from 2000 to 20 22 you know the the the real yield okay which is the yield less the rate of inflation has actually been negative and you know that is very bullish for gold and you know and and the reason for that is because you know you know at that point wining gold is not really costing you anything holding the bond does not only that more recently you know there's all this risk associated to you to owning us Treasures you know you get China selling the Federal Reserve is selling you got you

know the bigger the biggest buyers of the past 10 15 years you know are now selling you know so that in itself you know like um and at the same time you have central banks buying okay and and there's a whole reason for that you know like that has nothing to do with the treasures you know like you know I was commenting with you a little bit you know earlier maybe off offline where you know we see for example the Russian Ukraine war you know that situation you know really is creating a global

fragmentation you know that is basically dividing the West you know with the rest of the world with people who are align with you know Western values and the US essentially and and and those who do not and uh and you know the fact that the US for example you know kicked the Russians out you know from you know their Swift and you know different systems you know economic systems it's pushing not only the Russians but other outcasts to basically come forward with their own Solutions and agendas okay with their

own banks with their own funds you know so they can you know develop their you know themselves you know and not depend on Western on Western values you know eventually as that other system grows and you have two or multiple systems you know the only real a arbiter of value is gold is the only thing that is really going to be because you know if you have two systems that you very unlikely that you know one system you know maybe the US not have rubles most likely and most likely other system is not going to have US dollars

or maybe less and a lesser amount you know but they will have gold because everybody agrees that gold has been the currency for over 5,000 years and this is really a store of value very true very true and a followup question for you so in this environment that we're heading into what is your outlook for inflation how is that looking to you well no I think like you know together with the with the with the longer term with the higher for longer rates I think you know we have higher for longer inflation as well you know

and you know again you know it's not necessarily linear you know we're going to see pullbacks and you know trending up you know but I think that we will see higher inflation for longer and and and you know all these things tie into that you know the the the global fragmenting and you know the the concepts of near Shoring and TR Shoring the countries are starting to to adopt you know see the US already Western ER countries already moving away from investing you know further growth in China you know of

course there's still a huge relationship there but you know the new growth the new stuff is going elsewhere in the other places you know Latin America and you know those and that shift is very inflation you know the other thing that is very going to be very inflationary is because this other group that that the US and the and Western are basically moving away from control a lot of the resources globally you know and uh so you know in order for for Western countries to be able to use those resources and energy

and forward they're going to have to pay you know a price and it's going to be probably higher than than than what they've been used to so far and again all that is inflationary all these things you know over time as they play out will contribute to higher inflation for longer as well okay and you know possibly throwing into the mix their recession I know a lot of people have concerns about whether that recession is finally going to hit us just want to check in with you on that too and and see where you see

it absolutely you know so you know I haven't been honestly a big uh I haven't really been pushing the the the recession you know we've been actually in the camp you know that the the US is strong and that the dollar is strong and we've been in this camp for the past couple years you know not everybody it hasn't been a very popular stance but has been a very you know profitable one for us you know because that's really what's been happen happening now now ever since the dollar

broke and has been now downtrending and we see economic activity in the US starting to scale back we starting to see unemployment r a little bit we're starting to see labor participation you know scale back we're starting to see unemployment Seekers you know and you're starting to see things that are telling you that okay we may be you know like uh we may be we may may have passed the top or a peak of sorts and you know it might be time to to to pull back and and and as we see the dollar break down to to to

lower levels you know that is also very indicative of all that and well then of course because in today's world the dollar is still the reserved currency and most assets Commodities resources energy is priced in US dollars with the US dollar Falls and everything else will tend to rise and you know right now basically the my this issue my key word for this issue that I have this week today published tomorrow morning is uh everything right because you know the the decline in the dollar you know is

exactly what what what will bring and then again and that and I think and I think and I started to drop but I think that ties into you know basically the recession you know the the declining dollar basically is on declining a US economic data which you know tell us that yeah we might get a recession you know whether it's going to be a full-blown recession whether it's going to be a soft Landing you know I think that's just se you know but but but for sure a defin a definite pullback

in in economic activity on the dollar you know we're living it and it's probably going to continue okay okay yeah thank you for going over that that's really helpful and what's becoming really clear and I'm sure what people already know this is a really complex situation right now and I think a lot of investors are wondering okay so how do I handle that and I know you talked at the beginning a little bit about knowing your time Horizon at least when it comes to Gold you know you might

be a Trader you might be an investor but any other advice or ideas for people who are looking at this situation and trying to figure out what to do well yeah I definitely think that you know like um you know a big talk you know talking more macro you know I think like a big talk has been you know you know what has happened to the 6040 portfolio you know where are treasuries and all this do I do I need treasuries % of my portfolio no I think that one of the things that investors have to see moving forward is that if we are going

to be in a 30 40 year bare Market in Treasures you don't want to have such a big exposure to treasury okay you want to be able to to have that 40% of of safety in your portfolio with other things such as gold such as gold miners you know you know if you want if you don't want to be risky and go with the Juniors and you know like then you know there are very very safe big companies that you know you can you can you can buy that pay dividends that are very solid and stable a with great management

great assets you know like and I would encourage investors and Traders to to actually um try to a fill up that portion of their portfolio that's supposed to be for safety or for treasuries you know maybe not eliminate treasuries altogether but I would definitely you know share that space with gold with precious medals ER because I think that you know moving forward they're going to be favored over over the treasuries yeah I think I think that makes a lot of sense and I've been hear in from other people as why that 6040

portfolio is not really going to make sense moving forward so really good information I think that is kind of wrapping up all the questions that I had for you but I'm going to put it back to you and ask you if you have any final advice for investors especially heading into the new year or maybe also that us know where we can find you if people want to learn more absolutely um so you can go to my website it's a gold charts RS just with an r and a you like you know like are in the us.net and uh we are weekly trading

service and um you know you can you can um if you go there you can you can subscribe it's a $50 a month fee if you email me to O aalis at um aen forecast.com okay that's o a y a laden forecast.com I'll be more than happy to give anybody who emails me a a comp a one month comp to to my letter so they can see what we're all about and they could see more of these types of correlations these types that you know we're every issue is full of charts full of this type of analysis macroeconomics

and you know also we we provide very specific by and cell recommendations on a very short-term basis and and medium and long-term basis so um please uh you know join us and um I think uh you'll be pleasantly surprised amazing okay and I can include that information as well in the video description so people can check it out below if they want to see more thank you so much for for coming on to talk about what's going on in goldon and the market it's really good to hear from you and I

hope to do it again anything Charlotte thank you of course and once again I'm Charlotte McLoud with investing news.com and this is Omar aalis with gold charts are us thank you for watching if you like this video make sure you subscribe to our Channel we'd also love to hear your thoughts so leave us a comment below we'll see you next time [Music]