Transcription
Smart investors are not buying silver right now, and I'm going to tell you why in this video. Thank you so much for tuning in. I'm Jordan Royburn, a chartered market technician and master of financial technical analysis. And I'm going to get to that because there's several reasons why they're not buying right now.
The first one is because, well, it's twofold. The second or third reason is silver is underperforming gold right now technically, and that could continue, and I'll get to that. But the larger reason is because of that underperformance coupled with the fact that gold is still in a post-major breakout correction. Yes. And gold has had three major breakouts in its history. 1973 was the first. The second was in 2005, and the third was a breakout we had 25 months ago in March of 2024. And so those other two breakouts, there is a clear template for how their first major correction transpired, the first significant correction after their big breakout moves. And I have put them on the scale here of the current market and its correction, the current correction in gold, which is in black.
Now you can see the other two here. You can also see an average. And as I've said before, there's a clear pattern for these corrections. You have three legs. You have a sharp sell-off initially down to this point around here, and then the second phase is the market rebounds, and after the rebound, it tends to go sideways and grinds lower at the same time. Then the final phase is you tend to get a retest or a false new low before the end of the correction, and then the really strong rebound. And so this current correction is following that template. It came down here and bottomed right here, really close to where the other two bottomed, and now it's rebounded.
And so a key thing to point out with all gold corrections historically, other than when it's at a major top like 2008, which it's not now, which I can get into in another video, these corrections, the market tends to do the majority of price damage on the initial sell-off. So we can see that here. We've already had the initial sell-off. Then you have the rebound and sideways to lower phase at its end. Okay? And then you have the end here. And so the key now is time. We've had the initial sell-off. We've had the rebound. So now we could be in for two or three more months of chop. And the bullish scenario, if you're more bullish on gold than I am in the next couple months, then I would look for something like this where you see a consolidation, but maybe it tests 5,000. It holds above the mid-4,000s. So, you could see something like this. Again, that's the bullish scenario if you're a lot more bullish over the next couple months. But I think either way, I do think it's going to be two, three, four months before we see that strong rebound again.
And given that info, as we can see here, look, this is a gold-silver ratio. Gold divided by silver. So when it's rising, that means gold is outperforming. So gold is outperforming. And we have a bullish consolidation here in the ratio, which means there's potential before the correction ends where you get a move like that, where you see the ratio go to 75 or 77. There's a measured upside target here. So that's another reason why smart investors are not buying silver yet. Okay.
Now, technically, we're looking at the daily charts here. This is the gold daily candle chart, silver daily candle chart here. Now, technically for gold, it does have this resistance here, uh, 4,900, just below 5,000, also 4,800. So, the chart is not updated yet today, but gold so far has been struggling around 4,800-ish. So, maybe it has a chance to pop up here one more time, but I do think we've seen most of the rebound. And so what does that mean for silver? Well, we know that silver has already been lagging gold. So if the rebound in gold peaks out around here, just below 5,000, and peters out like that, you could see silver peter out like that. And so if we see gold in the next couple months eventually retest the low in the low 4,000s or 4,100, you'll probably see silver go down here and make a new low. So these are negative scenarios for silver in the short term. Don't get me wrong, I'm super bullish on silver beyond the next three or four months, but I'm just telling you why the big investors of smart money is not buying again yet. They're waiting. Okay?
And I'll tell you what they're waiting for. But first, I'll show you because this is instructive for silver. This shows all the rebounds in gold following post-breakout corrections. Now, this line here, those are the two that I think is the best case. Those are the corrections in '73, '06. This one contains '73, '06 and all of the post-breakout corrections. You have 2010, 2003, and even 2020 after the COVID crash, which was a post-breakout correction. But we can see here, look what happens after the low. And I put in a low here potentially middle of June, 4,200. So even in that scenario, look, you could be back at a new all-time high for gold, you know, right here at the beginning of October.
Now, why is that important for silver? There's two key signals for silver that we can take from gold. And this is something that I first noticed years ago when looking at gold technically, very, very closely and its impact on silver. So, the two key signals in gold that are important for silver are gold breaking out to a new all-time high and then gold after a breakout testing its 200-day moving average. So, let's go through the history here. We have gold here. This is a weekly chart. The moving average is the equivalent to the 200-day. And so in this chart I show here, I mark the breakouts and then the test of the 200-day moving average or the near test where it came pretty close like right here in '73 and also right here in 2010. It didn't quite test the 200-day, but it came close enough. And so let's run through the history real quick.
So early '70s, we know, greatest breakout of all time right here. This was the first pullback, although it wasn't significant enough like the one here. But anyway, we can see here, look where these two points line up for silver. Pretty good buying opportunities again. '78, '79. Gold breaks out, then it pulls back and does a retest. Bottoms at the 200-day moving average. Look at here. Okay, let's fast forward to the early 2000s. Here's 2003 again. You had the breakout. Then you had a test of the 200-day moving average. And look at silver after those things. Took a little while to get going, but huge move after that. Now after the GFC, global financial crisis, gold breakout again, then it comes back nearly tests the 200-day. Look, that's where we are now. Now, here's the COVID crash low where it didn't quite test the 200-day here, but the signal was the pullback during the COVID crash to the 200-day moving average. Then when it rebounded from there, look, that's what happened to silver. So, here we are again, even in the last three years, the epic breakout, second greatest breakout in gold's history. And then you not quite a test of the 200-day, but it took a little while for silver to get going. So, it's not necessarily a perfect track record, but as I've been saying, the key for silver now is going to be gold breaking out to a new all-time high. I think we're going to see this in reverse. So, I think we could see in the next two or three months gold test the 200-day moving average. Then after that, it probably rebounds, breaks to a new all-time high later this year. And that's probably when you get a low in silver, when it really starts to move up from that low. So that's the signal that I'm looking for for silver. Again, gold breaking to a new all-time high. That's the signal. That's when smart money is going to start piling in again.
And so referencing that gold breakout, this is a new insight that I want to mention for you. And so this is my gold major breakout analog chart. So, we have the three major breakouts in gold's history here. The current one is of course in black, but I'm not showing the '05 breakout, but I am showing the 1972 here in light blue. And also, this is the average. This other line, it's the average of the two, but I've tweaked the average because before the average was 50/50. Now, the average is 75% the '72 breakout and 25% the 2005 breakout because I think that fits better. This breakout is not is way closer to the '72, although it's not quite as strong, than it is the 2005 breakout. So I opted for 75/25 for that average. And another thing I want to note is that this breakout compared to the '72 breakout and that 75/25 average, it's about six to seven months behind. Here's what I mean. Look at this peak in gold here and now where I have this B where it corrected 27% already. This was the peak in '72 where it corrected 28%. Okay, look at the peak of the 75/25 average. It basically peaked right where the current market did. And if you go back to the beginning, we could clearly see, you know, there were two big legs after this pause here. There were two big legs in that '72 move. And with respect to where was that pause in the current breakout move? Well, it was right here, and then we had two big legs here. You know, it's not perfectly identical, but when we look at where the A's are, where this recent peak was, gold is about six to seven months behind the 1972 breakout. Now, that breakout peaked at 9200 in early 2027. So, where did the 75/25 breakout peak? 8,000. And so look at this. We'll layer on six or seven months. So this is about 11, 12 months from now. So what this chart could tell you is there's potential for an 8,000 target. We'll just call it late 2027, maybe 18 months from now, maybe 20 months from now.
And it's important to understand that, and I've showed this in past videos, a lot more capital is going to come into gold and precious metals. That's going to push gold, silver, gold stocks much, much higher. But you can see it here on the charts, the gold breakout against the stock market. Okay, you're probably sick of me telling you this, but what this indicates here and the fact that it's held the breakout, this indicates that a lot more capital is going to rotate out of stocks and the stock market and into gold. Okay, it doesn't mean it's going to happen tomorrow, next month, or next quarter, but three, four, five, six months, you're going to see the capital move in, and this is going to move like that. Okay, where's the capital coming from? If we're digging down, it's coming from tech. It's come out of a lot of other sectors. It's coming from tech. This is gold against the NASDAQ here. Look at this. A beautiful pattern going back to 2017. This is a nine-year long base here. Here's the NASDAQ 100, which is way more techy than the NASDAQ itself. This also has a nine-year long base. Look at how beautiful this is. I mean, look at the symmetry here. The polarity. Support, resistance, resistance, resistance. Again, it's going to take some time, but where is this thing going? It's going to move like that. Okay. And so, we're going to see a lot more capital moving out of tech and into gold and precious metals. Gold against the MAG 7. The chart, the chart doesn't go back far enough, but I'm looking right here. We can see there was a peak right here a little bit before when the MAG 7 ETF was introduced. And so, this is probably the resistance right here. And that's why you see a pullback in gold against the MAG 7. Okay. So this is another ratio that's going to eventually move like that. So again, capital is going to move out of the stock market and tech stocks and go into gold and precious metals. Okay, it's very important to understand there is huge room for more capital rotation coming.
Now moving on, let's talk about gold stocks against gold because this is one of the most important ratio charts to focus on right now. Here's GDX against gold. Here's the XIOU against gold. Okay, look, 13-year long base. Okay, what does this mean? Well, if you get a move like that, that means capital is moving out of gold itself and into the gold stocks. Again, XIU against gold. Look, and people, I'm not saying this is going to break out in the next month or the next two or three months. But the key is this is a really big time setup here for the next 6 to 12, 18 months. And it tells you what could happen that there's potential for capital to accelerate out of gold and go into gold stocks. And that is why I am so optimistic about the work we're doing and the companies I'm investing in, which I cover in the Daily Gold Premium. And thank you to all of you who have subscribed. I appreciate you and your business. And I am looking for companies that have 3x to 5x potential over the next two to three years. I'm looking for high-quality companies that have big upside potential. I'm looking for really good values and companies that can continue to add value over the next couple years, and those companies can generate extraordinary returns over the next two or three years if the bull market continues, which we all expect.
And days ago, subscribers got some excellent news where G2 Goldfields was acquired. And so from our original buy, we're up nearly eightfold on that company. And that's how you do it, people. You buy high-quality companies at really good values and then you just hold. You don't get scared out, you hold. And so, congrats to all the subscribers that made a big gain on that company. But, you know, I'm not resting on my laurels. I continue to look for value in new companies every day because the opportunities are out there. And so, if you own juniors and mining companies and you'd like a little assistance and expertise and help with your company selection and stock pick, there's no better service for you. Head on over to the DailyGold.com/premium. Would love to have you.
Okay, so wrapping this up, looking at the gold stock technicals in the short term. Here we have GDX, GDXJ, SILJ, and this rebound has gone above some key resistance points. So with respect to GDX, now we would look here at this level right here, which you'll call it around 105. Markets at about 9900 right now. Same thing for GDXJ. So you could get a little more of a bump here, you know, maybe to 140, 135-ish. SILJ. The next resistance would be right here, 35. So I'm not taking profits on anything or trying to hedge or do anything like that. Remember, people, the big money is made buying quality companies of good values and holding. And that's what we're doing in the Daily Gold Premium. Two or three weeks ago, we had buy signals on most, most of all of our stocks. Now, maybe the sector could push up a little bit more, but we'll have to wait and see. You know, either way, in either scenario, the bullish or the neutral scenario, you're going to get some kind of a chop and pullback here for a couple months. Whether it happens like this or down here like that, too early to say. You know, I'm conservative. I always lean to the conservative side, but we'll see.
So, got to wrap it quickly today. Thank you so much for tuning in. Hope you all had a good week. Hope you all have a great weekend. And I'll talk to you guys again next week.