Transcription
The experts are wrong about the next phase for silver. No, it's not breaking below $50 or $55 and going to $28 or $34 or $42. And at the same time, it's not going to $200 anytime soon. And in this video, I'm going to tell you why.
And for those who are new to this channel, I am Jordan Roy, a chartered market technician and master of financial technical analysis. And I've been analyzing and investing in gold and silver and junior miners for over 25 years. And I do a major video update every Friday evening. So, subscribe to the channel. I don't want you to miss it if you're new. But enough from that. Let's get to the video.
And so, I was just quickly looking on Twitter and YouTube because I have heard some scuttlebutt about $200 potentially this summer and I do have people asking me about it. And so I I looked on Twitter and YouTube and took some screenshots. And so I'm not attacking anyone personally here. I'm just looking at uh the idea that there seems to be more than one or two people who are looking for this huge parabolic move in silver to begin over the next month or two. And as we'll get into the video, there's just no chance of that happening.
So getting to the important content, let's look at the big picture here. And I have about two charts here which can explain. And so here is silver down here. This is silver against the S&P 500. The scale is inverted. And so that makes it easier to read. The numbers are based on the S&P divided by silver. Okay. But back to silver itself. As I've explained in other videos, as we know in recent quarters or recent months, silver broke out from a beautiful 45-year long base. It's the second biggest breakout in the history of capital markets. So silver has this floor. It has this major support at $50 or $55. It's not going below that level.
Now with respect to silver against the S&P, we can see where it is here and now compared to where it was at other points in history. And so right now this ratio is at 90. So, it has moved up, but it still has a really, really long way to go. Now, I compare where we are. We're a little bit past the beginning of the '70s, but I compare it to around here. Now, again, there's a lot of comparisons to the early '70s, 1972, '73. That doesn't mean we're going to repeat this exactly. It just gives us important historical context that there's still a lot more room for the precious metals bull market to go. And that means silver as well. So ultimately, I do see silver going to $200 and $500, just not anytime soon. But there is a long way to go. So we're not at the late phase of a secular bull market. We're still in the early phase of a secular bull market as this ratio chart would argue.
Now moving on, let's talk about the gold-silver ratio. So here's silver again, gold-silver ratio here. And again, this indicator helps us measure when the precious metals market is at a significant peak or maybe a cyclical peak. And so we can see historically when this ratio gets down here to 30 and below, that's when you're approaching the end of not only a cyclical bull, but maybe a secular bull. So where we are here and now in the 60s essentially, we're nowhere near that point. I mean, I like to call this peak here or this low in the ratio. We're at an intermediate-term peak in the sector. So there's still tons of room for this to go. And looking back historically, civil war, 1920, 1980, 60, 30, 60-year cycle that brings us to 2040, late 2030s. So, that's a long way to go, another decade or so, but this baby is going to fall quite a lot lower. And look, if you have a gold-silver ratio below 20 and gold's at $20,000 or $30,000, that's $1,000 silver, $1,500 silver. But folks, it's going to take a while to get there. That's not happening the next couple years. Okay.
Now, again, moving on to our next chart here. Now, here is a weekly chart of silver going back to 1970. And down here I have some volatility indicators. So these volatility indicators, these first two are looking at the width of the Bollinger band. So these are based on moving averages and such. And when the market makes a big move higher, you tend to see volatility really rise and expand. And conversely, when a market is going sideways like that or sideways like this, sideways here, if you look at the volatility, you can see it's fairly low. But when you get these huge moves higher and I've highlighted three here like this and this one as well, you can see look at the volatility indicators by the way down here. This is average true range. And so looking at that, we can clearly see how this indicator as well as these blows out to the upside when the price does as well. And so this is what just happened in recent months. Look at where we are historically. And so this type of blowout or volatility explosion that needs time to repair. So you don't typically see a market blow out to the upside, it gets cut in half, and then it's going to go right back up in the next couple months. It doesn't work that way.
Now, in my last video, I mentioned that for comparison purposes, maybe we're similar to 2006 and 1974 based on the 200-day moving average. These were points where silver corrected hard, but basically held above the 200-day moving average initially and for the most part. Again, we can see here the arrow shows them holding the 200-day. They might have went a little bit below it, but then they rebounded back above it. And so, what happened? Well, in both cases, after these volatility explosions, okay, it wasn't as much here, but after these big moves, you can see here, it took time for the market to stabilize, consolidate, volatility came back down before you eventually got to the next leg higher. Now, I'm not saying it's going to take silver four or five years to get to the next move, and I'm not saying it's going to be exactly like this here. Alls I am saying is you had this huge move higher. Now it's come back. You have really strong support here above $50. 200-day moving average here. The equivalent is almost at $60. This is a market that is going to stabilize and be range-bound over the coming months.
And so with respect to the coming months, let's get into gold and silver and the daily charts. And so here's the gold daily candle chart here. Here's the silver daily candle chart here. Here's the gold-silver ratio. Now, I have mentioned this in past videos. This is a bullish pattern here. I know it's hard to see these various bars here, but this is a bullish consolidation and the gold-silver ratio, which closed at 64. If that breaks up, it has a measured upside target of about 77. And you can see just looking at the price action since the peaks, gold has been stronger than silver. This is what happens. You hit an intermediate-term peak in the sector, gold tends to be stronger than silver. Silver makes a mini blow-off move or a blow-off move after it. Gold is stronger than silver. And so with that said, and thinking about the volatility aspect that I just mentioned, it also goes for gold. It's going to take time for both metals to find a low, stabilize, and then rally back up.
Now, with respect to gold, this chart here in the spot market didn't quite test the 200-day moving average, but in the futures market, it did. Now, the 200-day is still going to trend higher like this, okay, and get to the mid-$4,000s probably in the early summer. Now, we do have strong support here, $4,200, $4,300. It did make the low here below $4,100. So, those are the key levels. Very short-term, you could see a little more upside in this rebound. Perhaps you push up close to $5,000 before you start to get more selling again. And so with respect to silver, it's really the same outlook, but probably a little bit weaker. So I don't know if silver has enough strength to push all the way up here to the mid to upper $80s. Okay, it did close at $73. You're probably looking right here around this area. So, the mid to upper $70s. Again, if you see gold push up towards $5,000 and get close, you'll probably see silver push up a little more to $75, $77 maybe in that area before you start to see more selling.
Now, on the other side, $55, we know that's a floor for silver. The 200-day moving average here, we know that's moving up. And so these are levels to keep in mind over the next month or two after this rally or this oversold bounce in gold and silver runs its course.
And so focusing on gold here because gold is leading silver at this point or silver is lagging and will follow gold. I've talked about this in past videos. Here I am looking at in its history. Gold has had three major breakouts. You can see those down here '73, '06, 2006. Well, actually these are the corrections. The major breakouts were in '72, '05, and then 2024. And so those other two breakouts, I put them here on the scale. Their first big correction after the breakout. That's what I'm tracking here. And this other line here is an average of the two. And so we can clearly see there's a pattern. They sell off here. They make a low around here. Then they rally. Then they go sideways to lower. And so the average here bottoms, call it mid to late June, right around here. So we're looking at or the beginning of April here, Easter weekend. So we got another two and a half months or so. What is that, 8 to 10, 11, 9, something like that. So around that time frame, we could see gold make a bottom. So you do get a retest of the low. Maybe it goes below it like what happened in '73, or maybe it doesn't like what happened in 2006. But either way, you are probably getting some retest or some more selling before you get the big rebound.
And one thing I'll add, you know, this this down here, remember the 200-day moving averages here. So, you could test the 200-day moving average again or even undercut it. Now, in both cases down here, the '73 correction that undercut the 200-day, the 2006, I believe down here also undercut the 200-day moving average. So what a bottom that would be in two or three months here. Gold corrects, it loses the 200-day moving average. Everybody's talking about the bull market's over. But then what is history and other things tell us that this is what can be coming. So keep that in mind. We'll talk about that more over the weeks ahead.
Now in this chart, I'm looking at post-breakout corrections in gold. Not just those two that I mentioned here, which are here, which is this line here, the thicker blue line, but I'm looking at all. So, this includes 2003, uh, 2020, 2010. So, there's about five or six other ones that I put in. And so, this line shows this light blue one. This is a performance of gold after it tests a 200-day moving average during a post-breakout correction. So again, this here is the '73 and 2006 examples and the light blue is all the examples. There's like six or so. And so this is what happens when they test the 200-day moving average. And so I mentioned undercutting. So I mentioned '73 and '06 undercutting. This is what happened. Okay, they tested the 200-day moving average here, rallied a bit, and then fell below it. But look what happened. Boom. Now looking at all corrections, still a good rebound, but not quite as good. So this gives us a potential of what we could expect after June. And so I started the chart here at a $4,200 gold price in the middle of June. Okay.
So moving on, the breakout in gold against the stock market is still in place. Okay, so in recent months, we can see here gold broke out of a 12-year long base against the S&P, the stock market, and this has hugely bullish implications over the next couple years. This means that capital is going to move away from stocks and into gold. Look, it's already been happening over the last 18 months, but this ratio made this huge move higher here and it was really extended and I told it would pull back and it has. It pulled back and it's actually retested the breakout twice. This was that during the crash a month or so ago in gold down here. It held above this support during this correction. Holds above support again. So this is in a good position. It's going to take some time, but this is in a really good position where given a couple months, we're going to start to see more capital move out of the stock market and back into gold. Okay.
And what's driving that? This particular breakout. Well, it's capital is starting to move out. Well, it's already started, but look for an acceleration in capital moving out of the NASDAQ and tech stocks and into gold. And so, this is gold against the NASDAQ here. This is a daily bar chart. And this is where we are here and now. We have seen some volatility this year, big move up, then you had the gold crash, then a strong rebound, then it came down again during the correction. But look where we are here and now. Okay, we're right below major resistance. And so that you can see here there's a COVID peak here, peaks in the last couple months. And so we've pulled back, but this is nearly a 10-year long base here. Gold against the NASDAQ. So this is setting up really beautifully. And I've just sketched in here potentially how this could play out. This is just a guess. Okay, I'm free to change my mind, but maybe it plays out something like this. This rally continues for a little bit, then you get the retest and boom, then you get the rebound. And this is one of the last significant breakouts we're going to see because we've already seen tons of breakouts in these ratios. So, it's another really good sign for gold and precious metals over the coming months. And, you know, capital moving out of tech stocks and conventional stocks into gold and precious metals.
That's why I'm so excited about the work I'm doing in the Daily Gold Premium and the companies that I'm investing in personally. And that's what we cover in the Daily Gold Premium. They're companies that I'm investing in personally. And I'm looking for quality junior companies that have 3x to 5x potential over the next couple years. And I'm not assuming we're going to have $20,000 gold or $300 silver to make that happen. I'm looking at quality companies that are good values now but have really big potential when we begin the next leg of the bull market and you see gold go to $6,000, $7,000, silver rebound go back above $80 to $100 again. You can find quality companies that have that kind of potential 3x to 5x over the next two years. And every Sunday we put out a significant update for subscribers. And right now we are actually assessing the potential of our companies and companies on our watch list. So, it's a really good time to subscribe. You get our fresh expectations, you know, based on the cost inflation that's coming and how that's going to impact these companies. But at the same time, a lot of these stocks are 20%, 30%, 40% cheaper now. And so, for newcomers, they still have really good upside. To all of those who have signed up, I thank you for your business. I really appreciate you. And for those who haven't, if you own juniors and minors, you won't be disappointed. We'd love to have you. Head on over to dailygold.com/premium and you can sign up there.
Now, moving on, just one more slide here and that's looking at the daily charts for the miners. GDX here, GDXJ, SIJ. Uh, we didn't change any of these lines from last week. And so we can see we did get the oversold bounce here in the miners and they have come up to these resistance points. Now interesting, if you look at the daily candles from the last, call it three, four, five days or so, there's a lot of white candles which signals accumulation. So accumulation here, accumulation here. Yesterday, even though miners closed down, these are accumulation candles. Look, they opened all the way down here but then rallied. This is GDX. It opened here but closed here. GDXJ opened all the way down here but closed up here. So that was weakness being bought. When you see candles like that, that's called accumulation.
Now, I don't want to get super excited because I'm still expecting a couple more months of chop and it's possible that after a little more upside here, the miners could see some more selling and come back down here and perhaps touch their 200-day moving averages before this intermediate-term correction really ends and then you get the start of another big leg higher.
So, that's all for this video. Thank you so much for tuning in. Leave a comment. Love to hear your opinions. And hope you all have a great Easter weekend. And I'll talk to you guys again next week with our monthly chat with Professor Vince Lanci of Goldfix.