Gold’s Shallow Pullback And What Comes Next

(Money Metals News Service) In a recent episode of the Money Metals podcast, host Mike Maharrey sits down with Jordan Roy-Byrne, CMT, MFTA, editor and publisher of The Daily Gold, to unpack where gold and silver are in the current cycle.

Gold hit record highs in October, then pulled back—but the correction was much shallower and the rebound much faster than many expected. Prices have been holding near the $4,000 level, with gold bouncing from $4,000 on the very day they recorded the interview.

Roy-Byrne, author of the book Gold & Silver: The Greatest Bull Market has Begun, admits the strength of the rebound surprised him “a little bit,” but he’s not convinced the correction is over. He stresses that corrections are always a function of both price and time. Often, 90–95% of the price damage happens quickly, then the market chops sideways or retests the lows over several months as it builds a new base.

From his perspective, we are just over a month into this corrective phase. Historical analogs from the 1970s and 2000s suggest a typical consolidation lasting around five months. That implies gold could still drift lower, possibly toward $3,700, while silver could slip back into the “low 40s.” The bigger risk for bulls is not a crash but a grinding, three- to four-month (or even five- to six-month) sideways-to-down period before the next leg higher.

(Interview Starts Around 7:15 Mark)

Silver’s Relative Strength Is Sending A Signal

One key development in this episode is Roy-Byrne’s emphasis on silver’s behavior during the pullback. After the October peak, silver’s rally off the correction low was noticeably stronger than gold’s. Silver pushed back up to retest its recent highs, while gold did not.

That relative strength matters. In a weak or topping precious metals market, silver typically underperforms on rebounds and then “falls out of bed” versus gold. Instead, we are seeing the opposite: silver leading during a corrective phase. For Roy-Byrne, that is a positive divergence, not a warning sign.

It fits his longer-term view that silver will eventually “blast off” through $50, then $60, and “much higher than that.” In his framework, the current environment is a medium-term consolidation within a secular bull market, and silver’s leadership is one more confirmation that the bull is alive and well.

Echoes Of The 1960s And Early 1970s

Roy-Byrne’s big-picture framework hinges on comparing today to the mid-to-late 1960s and early 1970s. He looks at the three major asset classes—stocks, bonds, and gold (using gold as a stand-in for commodities more broadly). Right now, both stocks and gold are in secular bull markets, while bonds have flipped into a secular bear market.

Historically, that configuration is extremely rare. Using total real return for bonds and an 80-month moving average, he notes that from roughly 1920 to 2020, bonds were in a secular bull market. The last time stocks and “gold” (then represented by gold stocks, since Americans couldn’t legally own bullion) were in secular bulls while bonds were in a secular bear was roughly 1965–1982. That mid-to-late 1960s period—right before the explosive 1970s—offers the closest parallel to today.

On the cyclical side, he zeroes in on 1972–1973 for gold and silver. Gold’s breakout in 1972, coming off decades of price suppression under the gold standard, was—in his words—“the greatest breakout of all time” in capital markets.

It took out a roughly 100-year base dating back to the Civil War, when gold peaked around $50 an ounce. He likens that historic breakout to gold’s move in March of last year, when it finally broke out of a 13-year cup-and-handle-type pattern to new all-time highs.

Silver has its own 1973 analog. In that year, silver broke above its Civil War high—somewhere around $2.50–$3.00—marking its largest breakout on record.

Today, silver is trading around $50 and has already closed above that level on daily, weekly, and monthly time frames, essentially “flirting” with a definitive breakout. A clean move through roughly $54–$55 would, in Roy-Byrne’s view, line up almost perfectly with where silver was in 1973.

Overbought… But Still Deeply Underowned

One of the more striking contradictions in the current market is what Roy-Byrne calls the “overbought but underowned” condition of gold.

He cites a tweet by Ronnie Stoeferle referencing Bank of America Merrill Lynch data: despite the strong move in precious metals over the last 18 months, allocations to gold remain extremely low.

In retail client portfolios, gold accounted for just 0.4% of assets about a month ago. Among institutional money, the figure was only about 2.4%. That is remarkably small, given the magnitude of the price move.

ETF data tell the same story. In 2011–2012, assets in gold ETFs reached more than 8% of total ETF assets. The most recent figures Roy-Byrne has seen put that share at only about 2%.

This combination—short-term overbought conditions with structurally tiny allocations—leads him to reject comparisons with 1978–1979. He argues we are still in the early-1970s phase of the secular bull, not the late-stage blow-off.

In his view, the market’s positioning and the macro backdrop simply do not align with a terminal top.

Fiscal Strain And The Missing Volcker

Maharrey brings in his macro lens, drawing parallels between the 1960s and today. Back then, Washington layered Vietnam War spending on top of major domestic programs—the “guns and butter” era. That helped feed the inflation that ultimately erupted in the 1970s.

Today, Maharrey notes, the United States is running budget deficits on the order of $1.8 trillion, with debt levels that dwarf those of the 1960s and 1970s. Inflationary pressures are embedded in the system, and the federal balance sheet is under enormous strain.

Roy-Byrne agrees that this makes a “Paul Volcker moment” extremely unlikely. In the early 1980s, Volcker famously drove interest rates toward 20% to crush inflation. With today’s debt load, he argues, that kind of medicine would simply “bankrupt everything.”

Instead, he believes the eventual endgame for this secular bull market is more likely to involve some reintroduction of gold into the monetary system, rather than punitive double-digit rates.

Debunking The “Triple Top” And Misused Chart Patterns

The conversation then turns to chart patterns and the debate over whether silver is in a bullish cup-and-handle or a bearish triple top. Maharrey notes that silver just broke out of what many call a secular cup-and-handle formation, a pattern usually considered very bullish. Others, however, insist silver is forming a “triple top,” which they see as a bearish signal.

Roy-Byrne is blunt: true triple tops are rare and are usually part of a larger head-and-shoulders formation. Without that underlying structure—years of strong advance followed by a rounded, multi-peak topping shape—simply pointing to three high points on a chart and calling it a triple top is meaningless.

He acknowledges that in the short to medium term, silver could be forming a double top within this correction and might consolidate not three or four months, but five or six. That is the reasonable “bearish” risk in his view. But the idea that silver is topping out at the same level as its 1980 and 2011 peaks is something he “does not agree with whatsoever.”

Silver, he emphasizes, has already posted new all-time highs across daily, weekly, monthly, and even quarterly closes. That is not what a topping pattern looks like. Nor does silver’s recent outperformance versus gold fit the pattern of a market that has just made a major top.

On the cup-and-handle question, he makes another nuanced point. Gold’s 13-year pattern fit the textbook definition, with the handle retracing only about 38% of the cup. Silver’s structure is different. If its last 15 years were truly a handle to a giant cup stretching back 45 years, silver should have held above $32–$33. It didn’t, so technically that “handle” failed.

However, he says, the bigger picture is still extremely bullish: silver is carving out a “big, beautiful, massive 45-year-long base.” That base is just as important—and just as powerful—as any neat textbook cup-and-handle, even if the pattern label is technically wrong.

The problem, he laments, is that modern technical analysis often consists of people glancing at a chart for a few seconds, slapping on a label like “double top” or “head and shoulders,” and ignoring the detailed characteristics that actually define those patterns.

Gold vs. Bitcoin: A Major Turn In Relative Strength

Maharrey then shifts to another of Roy-Byrne’s recent observations: gold’s breakout from a nearly two-year head-and-shoulders bottom versus Bitcoin. The ratio chart he follows is simple—gold divided by Bitcoin. Over the last couple of years, that ratio has carved out a classic head-and-shoulders bottom, with three distinct lows.

The first low created the left shoulder, followed by a rally that failed at a certain level. The second, deeper low formed the head. The market rallied again, failed near the same area, then sold off into a third low that held above the head. That third low became the right shoulder. The “neckline” connecting the two rally peaks has now been broken to the upside, and the ratio has recently made a new 52-week high.

In plain English, that pattern says gold is now in a position to outperform Bitcoin over the next several years. Roy-Byrne sees this as potentially secular—something that could last 5, 7, even 10 years. He expects capital to gradually rotate out of Bitcoin and crypto and into gold as this unfolds, although he is careful not to put a short-term timetable on it.

This is part of a broader theme: in a real gold bull market, gold must outperform other major asset classes. Earlier this year, gold broke out against the stock market after a four-and-a-half-year base and also broke out against the traditional 60/40 stock-bond portfolio after a roughly 10-year base. Now gold is breaking out against Bitcoin and crypto as well.

Each of these breakouts signals that capital is leaving other assets—stocks, bonds, crypto—and flowing into gold and, by extension, into silver and the broader precious metals complex. That, Roy-Byrne argues, is what ultimately fuels “mini blow-off” moves like those in the early 1970s leading into 1974.

Bitcoin Is Not Digital Gold

Finally, Maharrey asks Roy-Byrne about the popular claim that Bitcoin is “digital gold.” Roy-Byrne rejects the idea. His friend Vince Lanci offers an interesting nuance—Bitcoin as “risk-on gold” and gold as “risk-off gold”—but Roy-Byrne insists that, functionally, Bitcoin trades like a technology asset, not like money.

Looking back over Bitcoin’s history since roughly 2010–2011, its big years have lined up with the best years for tech stocks and the Nasdaq. Its secular bull market has essentially mirrored the secular bull market in stocks over the last 15 years. The correlation is not perfect month to month, but at a 30,000-foot level, the pattern is clear enough for him: Bitcoin moves with risk assets.

Gold, by contrast, behaves differently. It is a monetary asset, a store of value that tends to shine when confidence in fiat systems, bonds, or stocks wavers. Bitcoin and crypto, in his view, are technologies, not money. He freely admits he is not a crypto specialist, but the trading behavior over more than a decade is enough to draw that line.

Where To Find Jordan Roy-Byrne

Before wrapping up, Maharrey gives Roy-Byrne a chance to point listeners to his work. At TheDailyGold.com, investors can opt in for a free copy of his book and access his free newsletter. Those interested in “high quality juniors with big upside potential”—the kinds of companies he buys himself—can subscribe to his premium newsletter.

He also runs a YouTube channel under “The Daily Gold,” where he publishes two to three videos each week. On social media, he is active on X (formerly Twitter), where his feed adds ongoing color to his written and video analysis – @TheDailyGold.

For Maharrey, whose focus is macroeconomics rather than chart patterns, these conversations with Roy-Byrne are especially valuable.

For listeners, the takeaway is straightforward: despite a short-term correction and some choppy months ahead, the combination of structural underownership, powerful long-term bases in both gold and silver, and gold’s breakouts versus stocks, bonds, and Bitcoin all point to a secular bull market that still looks much more like the early 1970s than the last gasp of 1979.