Transcription
The silver and gold market has been a little boring. It's about to get more boring, but I'm going to tell you why that matters and why that's important. I'm Jordan Roy Burn, a chartered market technician and master of financial technical analysis. Thank you for joining me.
And the answer is people, this is when we make our big money. When markets are rising, they're going up just like they were several months ago. It can lead us to making the wrong decisions. We make bad buys. We take too much risk. We overlever. It inevitably leads to bad decisions and losing money down the road. And so the reality is when you're in a secular bull market and the market is pulled back and it's consolidating, correcting, and it can continue for more than a month or two and get boring, exactly where gold and silver are right now. That is when buying opportunities arise. When you can accumulate more metal at lower prices, that's when prudent decisions are made and big money is made over the long term. So, please keep this in mind as this correction in gold and silver is likely to continue for a few more months and could get more boring. That's what happens. But that's a good thing. It's important. Gold and silver will find their equilibrium as summer begins and then they'll be in position for the next leg higher.
And so as you can see here on this chart, speaking of the next leg higher, this is my gold major breakouts analog chart. So for those who are new in this chart, I'm comparing the 2024 breakout in gold, which you can see here in black, to the other two major breakouts in history, 1972 and 2005. Now, the light blue line, that's the 1972 breakout. The other line is an average. And I've tweaked the average. It's not 50/50 now. It's 75% 1972 and 25% 2005. Why did I do that? Well, because this breakout has far more similarities to the 1972 breakout than the 2005 breakout. And something I've discovered here, this current breakout is following the 7525 line fairly closely with a 6 or 7-month lag. Here's what I mean. Look at the A and B points. We'll start backwards. Okay, this major peak that we had a couple months ago in gold, that's the B point right here. Look at the major peak in the 7525 line 6 or 7 months earlier, but the peak was right at the same level. Okay? And this was the 1972 peak which corrected 28% over five plus months. Gold has already corrected 27%. Okay, this is weekly data, but intraday it's already corrected 27%. And if you go back here, you can look at these A points right here which led to a consolidation. These A points which was a bull flag. A very bullish bull flag consolidation and then you had two big legs higher after that consolidation. So here's the A point here and you can see consolidation and then you had one, two, three slight pause here, two big legs higher. That's how you get the one, two, three. So big picture, we are still really bullish. And oh, by the way, the 7525 line that peaks at $8,000 gold. And if we add 6 or 7 months onto that, that brings us to, let's just say, late 2027, or conservatively, we can say by the end of 2027. So potentially, we're looking at $8,000 gold 18 months from now. And remember in 1972, gold declined 28% here. Then it moved all the way like that up to 9200 on the current scale. So big picture remains very bullish and that's why you got to love these boring consolidations.
Now moving on to sticking to the big picture just so we know where we are. So in my view, gold and precious metals are in an intermediate term correction right now. Now you have secular peaks and then you have cyclical peaks. The cyclical peaks were 74 to 75 and also 2008. So those are the peaks we want to avoid. And I do think we are halfway up to a cyclical peak. Maybe in the next 2 or 3 years, but that's a topic for another video. But in this chart here, you can see how gold against the S&P plays a big role in these cyclical peaks. And that's because for a cyclical peak to occur, you need to have a period of strong or vertical, as you can see here, outperformance with respect to gold against the stock market. So this led to a cyclical peak here. This move, this was steadier in 2008. Now look at all these other now all these other peaks before a cyclical peak like here and here, right here. Those are intermediate term peaks and you can see them here as well. That's a significant intermediate term peak. Here's another one. You could call that an intermediate term peak. Look where we are. That was an intermediate term peak. This is another intermediate term peak here and now. So, the reality is once this correction ends, once this boring phase ends, you will see gold regain outperformance against the stock market. And all that money is going to flow into gold and precious metals. And that's what you're going to get $8,000 gold in the next 18 months or so. So that's the big picture.
Now we got to get into the boring corrections and discuss where we are exactly. So here is my gold post major breakout corrections analog chart. And so again, we're looking at the current peak in gold late January. And on the same scale, we're comparing it to the peak in 1973 and the peak in 2006. Because people, you have to understand, there's three major breakouts in gold. There's not a fourth. And so, it makes total sense to look at those two other breakouts and see post breakout, when did they have their big, when did they have their first big post breakout correction. Okay, that's why we're choosing all these points. And hey, what do you know? Look, they are all following a similar pattern. And by the way, this middle line is the average where you have a leg down, then you have an oversold bounce and a rally, and then you have the final leg down. And so this is where we are right now. And look, remember about a month ago, gold bottomed exactly where it did on the same scale in 1973 and a little bit after the bottom in 2006. So this is what history tells us right now that this could be, this is the projection moving forward. Now, does that mean gold can't go like this? No. This history is just a guide. It's a framework. It helps us analyze the present because it tells us what has happened in the past and markets are markets. And so this is where gold is here and now. The B's show the bottoms. Okay. So, you have this bottom in 73, which was about 3,900 on the current scale, and then this bottom in 2006, which is a little bit above. So, at this point, I'm more interested in the time as far as where gold bottoms. I don't care if it bottoms here or or 4500. To me, it's the time. We're just going to need time. And it's going to take another two months or so, people. It might bottom a week before that or it might take two and a half months. Time is the key here, okay? So, that's what I'm focused on. Either way, this chart tells us we have more time for this correction.
Now, we're looking at the price action for gold and silver here. These are daily candle charts. Gold divided by silver ratio here at the bottom. And here, I've sketched out how things could play out for gold. The more bullish sketch, that's in case my preferred view is wrong, which is this. And we can see here we are in recent days we've gone lower. And by the way, I've not touched these lines. These are the same from the video a week ago. Uh, but we can see here gold is grinding lower slowly. Not the worst candles. You do have initial support here just below 4600. But gold remains below the 50-day moving average here. It was unable to move above that. It remained below the significant resistance around 4900. So, we could see something like this develop. That's my guess. Here's the 200-day moving average coming up like this. This is good support here. 4200, 4250. And one thing I want to note, if you look at those other two examples, when they bottomed, they fell below the 200-day moving average. So, falling below the 200-day moving average is not a sell signal for gold. That just tells us we're very close to the end of the correction.
Now, with respect to silver, for me, and silver closed 7563 today, this is a key support for silver right now, $66. So, I would love to see silver come down and put in another bullish hammer like we saw here. This was also a bullish hammer. Put in a bullish hammer like that right around here. And so that's one potential scenario where silver comes down here and maybe it goes below 66 and makes a tail here, but it doesn't close below 66. So a bullish hammer in that scenario would be very bullish. Or it could also break 66, come down a little bit lower and then form a bottom in this area. This to me, 558. This to me looks like rock solid support. The intraday bottom here was 60. Now we have the 200-day moving average at 61. So it's good to see all this support here filling in. And again, it's just going to be a matter of time. Most of the price damage in silver has already been done. This is a 50% decline. So now it's just an issue of time. What does that mean? Boring. It'll be a boring time over the next month or two.
Now moving on, let's take a look at the weekly chart. So there's two key levels here for gold. I put this line here. This is 48.25. And so we can see how many times the open and close of the candles or the tick marks touched 48.25. You can see here, this one, this one as well. And then you can look at the last three weeks where gold was testing 48.25 but couldn't quite close above it. So this is clear resistance. Now, this is clear support, 4250 on the weekly chart. We can see here how many times the tails or the open and close touch 4250 right there. Right there, there's a tail right there. There's another tail. The tail right here touched 4250. So this is significant support. And of course, you have the equivalent of the 200-day filling in here.
Now moving down to silver. I mentioned it last week. You know the bullish hammer here. This bullish hammer that held above this level here, which is 66. So, silver has not made a weekly close below 66. So, again, you have those two scenarios where it could come down, break below 66 on a weekly closing basis and then you get more selling and so maybe it puts in a bottom, a final bottom somewhere around here. Now, the other scenario would be it trades down here, but it actually closes the week above 66 and forms another bullish hammer like it did here and here as well. So that is what I'll be watching for four, six, seven weeks from now. Okay.
Now, gold against the stock market. And we can see here this is coming back pretty hard. Now this is a weekly line chart. So we can see here this is the former resistance, the clear breakout here. And look, gold has been outperforming the stock market. You had this big move here in 2025. Another big move from the middle of 25 into 2026. And I said this a couple months ago. This is way overbought. It's going to come back. It's going to probably retest the breakout. And that's what it's doing. And this is another reason why gold and silver are struggling right now. The stock market has rebounded and it's made new all-time highs. You know, expectations for corporate profits moving forward are actually really bullish right now. Okay. So, money is moving back into the stock market. If you look at base metals, copper is actually really close to a new high. So there's a little bit of optimism with respect to the economy over the next quarter or two. And so this ratio chart could come down to this level down here. It could have a little bit more downside. But people, this is in an uptrend. The primary trend here is higher. Primary trend is gold outperforming the stock market. But this downtrend could continue for another month or two or a few more months. It could come down here and take a little time to bottom out before we see this ratio regain a bottom and turn in favor of gold here. And so this is interesting with respect to are we going to see the gold stocks break out against gold sooner than we expect or before gold makes its next big move higher? Because normally you need a little bit of a move in gold first and then the gold stock starts to get momentum. But stepping back, you can see here this is a 13-year, 13-year long base here. GDX against gold. There's the XAU, another gold stock index against gold. And this is a 13-year long base here. And so we haven't quite got the breakout yet in these charts, but we will certainly see. And whether this happens in the next month or two or it takes three or four or five months, the setup here is super bullish for gold stocks. And it comes back to what I said at the beginning of the video. We're in a correction and this is setting the stage for that next phase. And that next phase is when you see a move like this where tons of money is pouring into the gold stocks, okay? When gold's going to 7,000, 8,000, etc.
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Okay, now wrapping this thing up with the stock. Let me show you some of my other breadth indicators that I use. Now you know about the advanced decline line, but I also have other custom indicators that I use. These are for GDXJ. And so this is the percentage of GDXJ stocks that are above the 200-day moving average. This is the percentage that are above the 50-day. This is the percentage that are above the 20-day. So this low here, the reason why we're able to identify it is because our data down here hit 0%. So at the low here, 0% of GDXJ stocks were above the 20-day and the 50-day moving average. What we are going to look for for a significant bottom is we want to see both these numbers back towards zero. So they've come down a lot, but also this here. So the percentage above the 200-day moving average, this is at 82%. Now we want to see this come down more like this as the sector corrects. So if we see this down at zero, we see this down close to zero. This is close to zero. And then this is down like this, that is going to tell us that the sector is really close to a significant low, probably more significant than this. And of course, we look at this breadth data and we assess it. We assess it in conjunction with the price action as well. So that is how we find low-risk entry points for the stocks.
Now finally here are the daily candle charts for the miners and we can see here GDX, GDXJ, XAU. And here are the recent candles. So we got a bit of a rally going the last couple days. Bullish hammer, bullish hammer GDXJ. We can see here long tails. So weakness was being bought the last couple days. So, you know, maybe we get a bit of a bounce next week in the miners. Of course, I'd love to see them come down like this at some point down to these support levels, but do think about the 200-day moving averages. So, these are coming up like this. Okay, so these moving averages will also provide support moving forward.
But to wrap things up, remember what I have said multiple times throughout this video. It's more an issue of time right now than price. So, I wouldn't be surprised if the miners did this for a couple months or if they did this for a couple months. Either way, the key is really time and that we have to be patient and let the market rest. Just let things play out over the next month or two and then we will be much, much closer to the start of the next big leg higher. So, that's all for this video. Thank you so much for tuning in. Hope you had a good week. Hope you have an even better weekend ahead and I'll talk to you guys again next week.