Transcription
If you own silver or gold, be a little careful right now. And I'll explain why in a moment. I'm Jordan Roy Burn, a chartered market technician and master of financial technical analysis. Thank you for joining me.
And so gold and silver, they were very oversold three or four weeks ago. We called the bottom. Then this chart helped us. We have seen a nice rebound here, but it could be coming close to an end.
Now take a look at this chart here. This is my gold post-major breakout correction analog chart. Now, as we know, gold has had three major breakout moves in its history. 1972, 2005, in 2024, the most recent one. I'm looking at the two biggest corrections that transpired during those first two breakout moves and comparing them on the current scale of the third correction, the current correction, which is in black here. So, the previous two, they're on the scale of the current one. Okay. And we can see those two and also this average here clearly show how there's a leg down, there's a rally, and then there's a final leg lower that lasts a little bit longer and it essentially retests the first low.
Now, black, that is the current market. So, at the end of March, we had a bottom very close to where those other two bottoms occurred. Now, we've had the rebound. And so this is the area where gold is at risk of peaking out and then rolling over. Okay. So this is where we are here and now.
Now the other angle is if I am wrong about this, we'll probably see gold push higher here up to 5,000. If we see gold go to 5,5100, then we're probably looking at a more bullish consolidation over the next couple months.
So let's take a look at the price action in the daily candle charts here for gold up here, silver at the bottom. So here we can see gold bounced from the 200-day moving average. Bullish hammer right here. Okay, now it's grinded higher up to 4833. Not quite as high as 4,900 yet. So that is going to be the resistance here. 4,900, 4950, or we can just say 5,000 and round up. This is clear resistance here. And this price action does not look impulsive to me. This does not signal the beginning of a new uptrend, which is fine. Again, 4,900, 5,000. This is where there's going to be more sellers. There's more supply. There's more resistance for gold in this area. And so, these are two potential paths for gold that I have sketched out here. The more bearish one is in line with the last chart in the correction analog where it's going to come down and roughly retest the first low. Okay? And then make some kind of a low by the end of June before it begins to rebound and then an impulsive move higher. And I say impulsive because you can see here, look at these rebounds. These were impulsive, especially the one after 1973 and that low.
Now, if I am wrong, the more bullish scenario would probably entail something like this where gold's able to push above 5,000. It comes back here and it probably grinds around this resistance and after a month or so or two months, it's able to push higher. The bulls went out and then it comes back to the high, then it consolidates for a little while before pushing much, much higher. So these to me are the two potential scenarios.
Now looking at silver, it's the same situation. Good rebound here. It's been steady in recent days. It's been able to push all the way up to 80, but we're looking at significant resistance here. Right at 81. Actually, I've been looking at this pretty close. And 81 is significant resistance as well as 90. So silver closed just below 81, just by a hair, 80.75. Now silver recently has actually been outperforming gold. That's a good sign. But still, if we, if gold were to turn lower like this, that's probably going to pull silver down a little bit. So the reality for gold and silver is we're in, we're getting into resistance. And even if you're short-term bullish, these are points where there's lots of resistance and supply to fight through. And these markets are going to slow down. It's just a question of are they going to slow down and chop like this, which would be a more bullish outcome, or are we going to see sellers force them all the way back down again to some kind of a retest of the low?
Now, moving on, let's take a look at the weekly charts. We can see here the weekly candle charts. Gold really nice bullish hammer and bounce off the equivalent to the 200-day moving average. This is the next weekly resistance right at 5,000 here. So again, 4833, maybe a little bit more room before gold can move higher, but it's coming up to test strong resistance probably this week.
Silver, I actually like the candles in silver the last couple weeks, especially this one. And the other thing about silver I want to mention, you have one bullish hammer here and then you have a second one here. And another thing I want to mention about silver, the stock market has rebounded and is rallying. And so when that happens, that's typically more bullish for silver than gold. And so that's why in recent days, we've seen silver stronger than gold. But that aside, I do like the bullish hammer here as well as the bullish hammer here. So you have this bullish hammer here with the long tail. This came all the way down to 64. The market came all the way down, tested 64 again, made another bullish hammer, even though it traded down to 60 intra-week. Look where the close was. The close was actually above 64 and we have seen follow-through here. So technically, silver is actually looking better and we've already seen this heavy selling already, 120 down to 60. How much more selling is really left? Okay, when silver's at 80, I mean, how much more selling is really left? Is there enough selling left to push us below 60? I don't think so. And look, that may be true for gold as well. 4833. Is there enough selling left to push gold below 43, 42, 4100? I don't think so. So, I know that's a nuance take, but I'm just, I'm pointing out here. Even though I think the path of least resistance over the next month is probably lower, we don't want to get that bearish.
Now, moving on. As I mentioned, the stock market is rebounding and that's why gold against the stock market here has come down. We can see here this has come all the way down in the last couple weeks. So, it's retesting this low again. I'm not worried about a failed breakout. Okay. Again, big picture, this ratio has broken out from a 13-year long base, and it was way overbought here. Now, it's coming back down. It's going to chop around for another month or two, and then it'll probably reassert itself to the upside. But again, very short-term, more money is moving into stocks than gold on this rebound in risk assets. Okay? Oil's come back, interest rates have come down. So, people are more optimistic about the economy. That's why the stock market's outperforming gold. But when this ratio finds its footing again, that's going to be better for gold and precious metals. And by the way, this weakness here with respect to gold against the stock market, and it's one signal telling me don't expect precious metals to have that much more upside in the short term because they're underperforming the stock market right now. Okay?
And we can see that here again. Big picture, these are set up super bullishly for gold and precious metals. Okay? Nine-year base here. Another nine-year long base here. This is a three-year long base. Gold against the MAG7. But look what's happened recently. Money has come back in the market. Tech stocks are rebounding again. They're having a better oversold bounce in gold. And so there's no threat of breakouts here for precious metals in the next couple weeks or the next month or two. It's going to likely take 3, 4, 5, 6 months. So again, the nuance here, if we're looking out 4, 6, 12, 18 months, super bullish for gold and precious metals. Huge breakouts coming. Lots of capital moving away from the tech stocks and into gold. But over the next month or two, it could be the opposite and it's already been happening over the last month.
Now, what's interesting is gold stocks are actually outperforming gold in the very short term. And the reason for that, again, stock market strength. And so we have to keep our eye on gold stocks against gold as we show here. GDX against gold, XIO against gold. What do we see here? These are 13-year long bases. Here's the recent action. You can see here in the thumbnails, very strong gold stocks are outperforming gold. Are we likely to see a huge breakout here over the next month or two? I don't think so. You're going to need to see more strength than gold and relative strength or these ratios to make a move like that. But the setup here with respect to gold stocks against gold again over the next 4, 6, 12, 18, 24 months is super, super bullish. That is why I'm so excited about the daily gold premium and the work we're doing the companies we're investing in. And for all of you who have subscribed to our premium newsletter service, thank you so much. I appreciate you and your business. And for those of you who own miners and juniors, this is a service for you. I am focused on covering the stocks that I personally am investing in. And so my criteria is I'm looking for high-quality companies and assets that have 3x to 5x upside potential over the next two to three years, over the last half of the cyclical bull market in gold and silver and miners and juniors. As soon as you subscribe, you get access to all my research, all my material that I have spent thousands of hours putting together, as well as all future updates for as long as you remain a subscriber. Head on over to the daily.com/premium. We'd love to have you come aboard.
And let's wrap this thing up talking about the gold stocks. And here is one thing to keep in mind. If you're looking for a bullish signal for gold stocks as well as the sector, watch the GDX advanced decline. What's the advanced decline line? This is a measure of the cumulative participation of gold stocks. And so the cumulative participation is a trusty leading indicator. And that is because usually it makes a higher high before GDX does. Here I've shown and going back here you can see all the higher highs in the advanced decline line versus at points where GDX did not make a higher high. But look, these higher highs preceded this big move here as well as right here. These were higher highs. GDX was correcting. Then it moved up like that. Now here and now the advanced decline line. It hasn't made a higher high yet, but it's not that far away. So, my opinion is I don't think we're going to see this make a higher high, okay, over the next month. But, I could be wrong. And if I'm wrong about the sector and this makes a higher high, that could be a signal that the correction's over and that the gold stocks are going to start moving to new highs again. So, that's why I keep an eye on the advanced decline line.
Now, wrapping things up, here are the daily candle charts for miners and and we can see here miners have been able to grind higher this week. Okay, look at the thumbnail here. Now, not exactly the strongest candles in recent days. You can look at two of the last three days. These are distribution candles. This is a distribution candle where it traded, it opened here, traded all the way up here, closed here. That means all of this is selling. Okay. Now, same thing for GDXJ. Look at the previous two candles. Those are bearish candles. This is also a distribution candle. This is a big distribution candle in the silver stocks. Now, does this mean that the miners are going to dump lower immediately next week? Not necessarily. It just means that we're not seeing real buying power or real accumulation behind the move in recent days.
Now looking at the price action here, we can see it is possible the miners could push up a little bit higher, but they're going to be coming up towards more significant resistance. Okay, so there's a little more room for upside in the short term and then there is risk that we could see some more selling and profit-taking. So short-term, I wouldn't be chasing the strength, but as subscribers know, I'm a buy and holder. That has always worked out the best. And it all comes down to focusing on individual companies. There's some individual companies that are buyers right now and some that are not. And in a month or two, we're probably going to be seeing a lot more buys as this correction matures.
That's all for the video. Thank you so much for tuning in. Make sure you're subscribed to the channel. I don't want you to miss any of these Friday updates. Hope you had a great week. Hope you have an even better weekend. I'll talk to you guys again next week.