Jordan Roy-Byrne: Here’s Why Silver Will FINALLY Outperform Gold

Mike Maharrey: Greetings. I'm Mike Maharrey, an analyst and reporter here at Money Metals, and I'm joined today by Jordan Roy Byrne. Jordan is a chartered market technician and master of financial technical analysis. He's the editor and publisher of The Daily Gold and the Daily Gold Premium, and he's also the author of a brand new book that I believe just came out in January titled Gold and Silver. The Greatest Bull Market has Begun Greeting. Jordan, how are you?

Jordan Roy-Byrne: Hey Mike, I'm great. Thanks for having me.

Mike Maharrey: Well, I really appreciate you taking a little bit of time to hang out with me here on the show and looking forward to digging into gold and silver market stuff here. So I'm right, you did just release the book in January, am I correct about that?

Jordan Roy-Byrne: Yes, I released it for free, although it is going up on Amazon. Should be very shortly, should be any day now. It will be a hardcover version and I was against a paperback because as you know there's quite a few charts and images in the book, so I don't want those to fade over time.

Mike Maharrey: Yeah, absolutely. Well, your timing couldn't have been better. Obviously both the gold and silver markets have been kind of in a bull run for the last well over a year now. And so I would like for you just to make the elevator case for why you think this bull market is going to continue.

Jordan Roy-Byrne: Well, that's difficult. I could probably give you a 200 page thesis or a 10 page thesis.

Mike Maharrey: That's why I say elevator.

Jordan Roy-Byrne: Well, the elevator pitch is you have the major asset classes, gold or I should say stocks, commodities, bonds, and of course gold is the granddaddy of commodities, and they move in secular trends. Stocks tend to move for 15 to 20 years. Bonds tend to move even longer than that. They can have 30 to 40 or secular trends. And for gold, historically it's not always uniform, but the last two secular bull markets were about 10 or 11 years or so. So asset markets have these secular trends and bonds have already, their bonds are now in a secular bear market, which we've only seen one of those in the last 100 years, which was 1965 to 1982. And stocks are really close to the end of a secular bull.

And so, this is really mirroring what happened in the mid to late 1960s and 1970s. And so we know that gold having broken out of that 13 year cup and handle pattern and going above $2,100 an ounce, now it's in a new secular bull market. And when the stock market secular bull ends, which I mean who knows, it could be two or three years or two or three months when that ends, you are going to see, or you have the setup for gold and silver and all commodities going dramatically higher because the late sixties and seventies, this will be a time when the two major asset classes are in secular bears and hard assets will be in a secular bowl. So that's kind of the 50,000 foot view in elevator pitch. And so gold and silver, they've gold especially, they've already performed well, but they'll perform even better when we get this break in the secular uptrend in stocks.

Mike Maharrey: Yeah, that makes sense to me. And that kind of brings me to maybe a peripheral question, but it's something that I'm curious about you as you kind of alluded to, you use a lot or that might've been when we were talking before we were on air, but you use a lot of charts and you do a lot of technical analysis. Now be honest, that's not something that is really in my wheelhouse. Can you kind of explain to the listener kind of what is technical analysis and why is it valuable? Because I think a lot of people just kind of invest on their gut to be honest with you.

Jordan Roy-Byrne: Well, it's the study of trends in market action and sometimes it gets a bad rap because now with the proliferation of technology and social media, you can see lots of bad and faulty technical analysis. And at times, I probably did that earlier in my career, 7, 10, 12 years ago, I probably contributed to that bad technical analysis. But it's really the study of price trends and at the core of it, you're really assessing supply and demand. So technical analysis, it can be predictive when you're looking at price charts, but it's really the study of supply and demand. And what I like doing or the area of technical analysis, which is new as far as 20 or 25 years, which I really like most, is intermarket analysis. And that's studying the various moves in all these different markets and how they kind of align or impact each other.

And at the same time, I really enjoy looking at, in the same segment, I enjoy comparing gold against the stock market, gold against bonds. How's gold doing against this? What's the gold silver ratio doing? So if you know how to use technical analysis, you can glean significant information from that. And even though I'm a technical analysis is my trade, I'm trying to put it forth in this book in a way that people can understand, even though it can seem really technical, I'm trying to convey some basic viewpoints, kind of what we talked about at the start. I mean in addition to looking at fundamentals and there's also in terms of sentiment and money flows, people in technical analysis study that I don't know if studying sentiment if that's directly a branch of technical analysis or not. I mean I guess it is, it's not really charting, but you're looking at all these different things where you're assessing data and you're assessing facts versus, and I do think fundamental analysis is great. I'm not only looking at one thing in my work, you have to look at everything. But sometimes with fundamental analysis, oh, well what's the economy doing? Or what's GDP going to be minus 1% or two or 3%? What's going to happen with this company? So that can be a lot more difficult to predict.

Jordan Roy-Byrne: Whereas if you're looking at technical analysis, there're a number of things that you can look at that actually help convey fundamental information. It sounds ridiculous, but you can look at, okay, what happens before recession or what happens before stagflation? You can look at various charts of various markets and assess, OK, is this lining up with what I'm seeing in the economy? Is there something different here in the charts? Could this be conveying a trend change? So that's how I look at technical analysis. I don't look at it as entirely predictive. I look at it as something that together with fundamental analysis can be really, really powerful. And so the way I'm looking at it in this book is really a 50,000 foot view so people understand, look, the bond market is clearly broken. We've only seen one secular bear bond market in the last a hundred years. And so it's insights like that in the book that I think can give people a real, even though it's kind of basic, it can give you a really strong understanding of, or a guide of what's happening right now and what this can lead to.

Mike Maharrey: That really makes sense to me. It's interesting because when you mentioned the secular bear market and bonds, I've only heard one other person really out there talking about that, and that's Jim Grant, and he makes the same case that the bond cycle is very, very long and we're just now coming out of this very, very long bull market in bonds. So he's talking about the same kinds of things, but you don't hear that kind of analysis a whole lot except from folks that are kind of, I think a lot of people would consider a little outside of the mainstream as the saying goes. Yeah, that makes total sense to me.

Jordan Roy-Byrne: Yeah, I'm sorry, go ahead.

Mike Maharrey: No, you go ahead. I was going to move on to something else, so I finish the thought.

Jordan Roy-Byrne: Oh, yeah. Well, and the thing about bonds is this is such a massive asset class. I mean, this is really the biggest asset class. And so when you think about it, we've only had, other than 1965 to 1982 ponds have been trending higher or at least sideways to higher or really higher for the better part of 85 out of a hundred years. So just only one 15 or 17 year period they've been down in a hundred years. So people really don't know what that entails. And you're right, nobody really talks about that. And by the way, I do mention in the book, well, if we get a recession in the next year or two, you can see a countertrend move in bonds. So I'm not trying to say bonds are going to go, I mean over time because of the secular trend, they will go down, but as we know, there can be countertrend moves like bonds. They could have a big rally now this year if we're about to go into a recession. So I do mention that in the book.

Mike Maharrey: Right. Yeah, that absolutely makes sense. Any kind of trend, what's the saying, people like to use any bull market climbs a wall of worry, so you're always going to see ups and downs. And it's interesting to me, I tend to be, I think a lot, I'm more of a long-term kind of guy. I'm interested in macros, I'm interested in the bigger picture. And I think a lot of people get so hung up and oh my gosh, gold's down $50 today, panic. And they're not putting that into any kind of context at all. And I think it's really important to have the context of like you're saying, the technical analysis where you're looking at the trends and an understanding of the fundamentals that are working in the undercarriage of the economy, so to speak. So it's good to have that perspective out there. I wanted to talk a little bit specifically about a silver, and you mentioned specifically in one of the things that I read as I was getting ready for the interview, that you think that silver is going to outperform gold as we move forward in this bull market. And I think a lot of people will hear that and say, well, I've been waiting for this forever. We've been kind range bound, and we're still at what, 90 to one plus on the gold silver ratio. So why do you think that silver is set up to even perform better?

Jordan Roy-Byrne: Well, because we know that from history, when you're in a secular bull market and precious metals, silver will ultimately outperform gold. And I do have my own reasons why I think silver is underperformed, which is also the reason I think the stocks have underperformed the miners in some people's eyes. And that's because gold has not outperformed the stock market yet. It's not broken out fully against my 60 40 indicator, which is a really, really important indicator to tell you, is money flowing into conventional assets or is it flowing into gold and precious metals? And so as we're speaking, I mean this year could be a real turning point where we finally get that shift where based on the charts here, and again, this is conveying really, really important information because you have the traditional 60 40 portfolio, and if that's doing well and outperforming gold, then we know that people are putting their money in conventional assets and they're not going to put them into gold.

Jordan Roy-Byrne: But based on this indicator, you can see that the points when gold broke out or really started moving higher against this 60-40 portfolio, it was a real turning point for gold and precious metals. I think at the end of 2001 and the very end of 1971, that's when that happened. And so now we're coming up on a 10 year base. I mean, it looks like it's slowly breaking out, but this is really, really significant because again, we're looking at gold against the conventional portfolio, and this is coming out of a 10 year base. And when a market breaks out of a really, really long base that has significance for years and years, not just the first couple months or year after the breakout, this is setting up for a really powerful move higher. And if it happens, which I think it will sometime this year, and you get a real acceleration in gold, people can look at this chart and understand, okay, this is the significance of what's happening. This is a move that's just starting. We're just seeing the beginning of capital flowing out of conventional assets and into gold. And it's also significant because you need those extra capital flows into the precious metal sector.

Jordan Roy-Byrne: They're important because that's really when silver will get more of a bid and outperformed gold, that's when the stocks will do better. So that's really kind of the macro and technical behind silver. And you notice I don't talk a lot about industrial demand. I will say I don't think industrial demand really has any impact on the price, at least right now. I know that it's really heating up, but for me it's really gold that drives silver silver's a leverage play on gold. But as far as industrial demand, and I don't talk about this in the book because it's not really in my wheelhouse, but it is interesting how I was talking to David Morgan, I'm sure you've interviewed who knows way more about silver than me and probably most anyone. And just privately, I don't know if he would want me to share this, but he was just showing me some industrial demand data and just projections on what could happen in 10 years.

Jordan Roy-Byrne: We could come into a situation where someone tries to corner the market again, just because the industrial demand is growing so fast. If you factor that in with a secular bull market in precious metals and metals, prices are moving higher at the same time and you have a lot of investment demand. That could be a real explosive situation for silver, not necessarily now in the next year, but something in the next decade we can look ahead to. And the last thing about silver I would say is you have this technical setup where everybody calls it a cup and handle, but technically it's not a cup and handle pattern. Now, gold's pattern was a real cup and understanding that was significant because when gold would break above 2100, it's breaking out of this 12 or 13 year pattern, you would know this is really significant. This is going to lead to higher prices. This is going to be a big thing for the next decade. Now for silver, when silver gets back to 50 and breaks above it, I mean to me that really would be the second biggest breakout of all time. I think I talk about this in the bonus chapter.

Jordan Roy-Byrne: This is just you don't see in technical analysis like many 45-year-long bases in the chart. So this is a perfect 45 year-long base

Jordan Roy-Byrne: And one silver breaks above 50. It is really going to go crazy. If you look at copper, I think broke out of a 30 year base in the mid two thousands, oil broke out of a 20 or 25 year base in the mid two thousands. So when a major commodity has that kind of a breakout, they make a really, really significant move higher. So that's just like the history. But then even if you just look at silver just by itself and just the chart in nominal terms just by itself, you can say, when this breaks about 50, this is going to be a really, really explosive move. This is not just going to 57 or $63. I mean, this is something that could go to 90 or 95 bucks in 12, 13, 14, something like that after it makes a breakout. So I look at that by itself.

Jordan Roy-Byrne: I look at all these different things, and then you look at the history of secular bull markets in precious metals, and again, there's not a lot of it, but what we see is that the gold and silver ratio comes down and by the end of those markets it gets under 20. So, when you think about that, you think about the technical setup that silver has, you think about industrial demand is really, really starting to accelerate. You look at the outlook for good, so you're factoring all these things and it just tells you this. For silver, it can be a really, really explosive situation, not just over the next few years, but over the next 10, 15 years.

Mike Maharrey: Yeah, I agree with you. There's so many dynamics that are in play and almost zero of them would I consider to be bearish in terms of silver. And as you mentioned, there's that whole dynamic. I think it's important for people to understand, yes, it is an industrial metal. Yes, industrial demand has a significant role, but it is fundamentally a monetary metal and it does track with gold over time. And as far as, again, I'm not nearly as well versed in the timelines and the technical stuff as I'm sure you are, and people like David Morgan. But I do know that typically it is the latter part or deeper into the Gold Bull run that you start to seed silver making that ketchup. It's not usually in the early part, we kind of saw that during the pandemic where silver actually sold off and then rallied later after gold had already started its run.

Jordan Roy-Byrne: Yeah. Hey, I'll just add 2 cents to that. And that's why one thing I've always said, when gold breaks out, you can buy silver because silver will eventually follow and you don't have to chase gold.

Mike Maharrey: Yeah. Do you follow the Federal Reserve monetary policy closely?

Jordan Roy-Byrne: Good question a little bit. I don't get too much into the details, but I do follow a little bit. It is important.

Mike Maharrey: Yeah, I mean, that's kind of one of my pet things, I guess, and I've been kind of watching this. I feel like the fed's in a tightrope right now because on the one hand, they need to hold interest rates higher because we've still got the kind of sticky price inflation. And then on the other hand, we have so much debt in the economy. There's so many investments from decades of what I would argue is artificially easy money, and how do you walk that tightrope and navigate that when you really need to make two different policy moves at the same time? Do you think that as we move forward, do you think inflation is under control or do you see more inflationary pressures as we move down the road?

Jordan Roy-Byrne: Well, I think if we were to have a recession, inflation will probably come down, but I don't think that would be permanent. I think whenever we have the next economic expansion, I think they'll have to cut rates and you'll probably get a little bit of fiscal spending on top of it, even though they say they're not going to do that, at least the federal government right now. Yeah, I don't think it's under control. I think, again, you go back and you look at the late sixties and the seventies, I mean there were ebbs and flows. I mean, there were periods where I think the CPI was two or 3% on the downside, so I could certainly see it the CPI or inflation metrics coming down a little bit more, again, if we are about to go into an economic downturn. But that doesn't change the fact that let's look at where commodity prices are. I mean, copper's another one where copper's on the cusp of breaking out of a 12 or 13 year base itself. So if you look at these commodity charts and you think about gold's breakout and silver coming up, I mean, the markets are telling you what is coming over the next 10 or 15 years

Based on these charts. They're not necessarily predicting it's going to happen next month or next year or in 18 months or three years. But they're telling you from a 30,000 foot view, there is a serious, serious risk of some major inflation in the pipe. And yeah, I mean short term, or at least for the rest of this year, again, if we have an economic downturn, inflation probably won't be a problem statistically. But the problem is we've already had so much inflation come in that even if inflation gets down to 1.5% or 2%, that doesn't help anybody. I mean, the population needs, they need prices that come down once you've already had covid and prices are up significantly. That doesn't help anybody. You need prices to go down and prices going up by one or 2%. Yeah, economists love the, “Oh, inflation's low. It's come down.” It doesn't reflect reality whatsoever. So

I think it's embedded now and it's going to be a major problem over the next few years, even if we have an economic downturn and prices kind of come down for a little while.

Mike Maharrey: Right, right. I agree with you that that would be temporary. And then of course, as you pointed out the Fed, I mean if history is any indication, if we do have a major economic downturn, rates are going back to zero. We're going back to quantitative easing, which is by definition inflation. And the price inflation is sure to follow that. I see inflation in the no matter how the Fed goes, but so here's a fun question I like to ask folks that are deeply embedded things. What is something that you see that you think is extremely significant for the gold and silver markets in particular? Or you can even think a little bit more broadly in the markets in general that you're looking at that most people out there in the mainstream on CNBC Fox business are completely missing?

Jordan Roy-Byrne: Well, I already mentioned it. I would say it is gold coming up now on the potential to break out of this base against the 60-40 portfolio. So again, this is looking at, this is a ratio. So, I have 60-40 portfolio data where I made this 60-40 portfolio. It's total return data from the stock market going back a hundred years. Same thing for the bond market. So, I made this into a 60-40 portfolio index. So this includes dividends too. And again, this is an indicator where we're looking at gold against basically the conventional portfolio. And even though gold has gone up since the 2016 low, since the covid low, since the 2018 low, it has not, it's gone up a little bit against the 60-40 portfolio in recent years, but it has not broken out of this 10-year base. It's getting really, really close to doing so.

Jordan Roy-Byrne: And at the same time, we have gold coming up gold against the stock market in the last day or two that's been testing a four-year long resistance. So if we are to see these charts break out in favor of gold, these ratios going up, that is going to indicate a real significant sea change where you're going to start to see, doesn't mean everybody's going to sell all their stocks and buy gold and silver, but it does mean that everyone will probably start to move a little bit of their money into hard assets and precious metals, and they'll sell a little bit of their stocks at the same time. And so these charts are so important because they signal where is the capital moving, where is most capital moving? Is it moving in favor of gold or is it moving in favor of conventional financial assets?

And again, it's great that we're talking right now because this is, we're gold against the stock market, which is 40% of that basket that's coming up on a four-year long resistance. So that's really close to, it's a breakout and the overall gold against the 60 40, again, it's coming up on a 10 year base. And so again, if we get the breakout in favor of gold, that's going to signal the start of more and more capital moving out of conventional assets in favor of gold and then eventually silver. So, that to me is really the key to everything that will be a big sea change from what we've seen over the last 4, 6, 8, or nine years or so where gold has been trending up. Silver, not as much. The mines not as much. Money's still going into the s and p and the stock market because it's still in a secular bull, but when we get this breakout in favor of gold, that's just so extremely significant just for gold and precious metals and economy also at the same time, because again, it's going to signal capital's moving out of conventional assets into gold.

That's not a good thing for the economy and financial system.

Mike Maharrey: Absolutely. Yeah. It is funny to me because if you listen to the mainstream guys, every time there's a correction, “Oh, bull market's done, it's over.” And I don't know, it's just that they can't seem to see past their noses, and maybe that's somewhat of a function of the world we live in where it seems like everything is driven by the latest post on X or Facebook or something, and people get all wound up about these short-term moves. So, I really appreciate the fact that you're looking at this from a longer lens, and I'm inclined to agree with you what you're saying from your point of view, definitely dovetails with what I've been writing about and talking about as well. So, before we go, I do want to give you an opportunity to pitch your book, let folks know where can find it, where they can find your newsletter, and how they can follow your work so that they can dig deeper into what you're doing.

Jordan Roy-Byrne: Oh, thank you. Yeah, the book should be on Amazon in a few days. However, you can get a free PDF copy, and I am going to upload, I think an E-Pub copy, so it's easy to read on your device. If you go to https://thedailygold.com/book, or the same form to opt in is also https://thedailygold.com. So, I would say you can get it for free there. And yeah, a hardcover version I think will be on Amazon in a few days. But what I do is I invest and write about various junior companies. I'm not looking at penny stocks, but I tend to look at what are the small gold and silver companies that management has a really good track record and they have potential to build a mine or build a couple mines, grow production and really leverage the gains that you get, the potential gains in gold and silver and in a real gold and silver bull market. So I tend to focus more on those companies than the really big miners or the really tiny penny exploration stocks.

So, that's what I like to do. That's what I write about in my service. A lot of the things that I'm telling you in this interview I service and I'll just say what the stocks, because I know there's some people on the metal side, they will say, oh, we'll only buy metals. Don't buy the stocks. Now, I will say with gold and silver in the mining sector in the junior sector, there are a lot of landmines and pitfalls that you can run into investing in the mining sector, which is why you need to have a significant amount of experience and expertise at the same time to know which are the right companies to invest in and which ones to avoid. And so again, I would say if you're someone who, I mean if you're just staring at your computer screen and you're a trader and you're just buying the ETFs, then yes, it makes sense to prefer gold and silver over the individual stocks.

But if you're really willing to do your homework and buy individual companies and do a serious amount of research and talk to people and get educated, then my newsletter product might be something that fits your needs. But again, if you're not willing to do the research and homework on individual companies, that's fine. But over a long period of time, the stocks, a basket of the stocks is not necessarily going to perform better gold and silver. So again, that's why I say, I know I'm rambling on here, but you have to be really serious if you want to get into, the companies can't just kind of half-ass it and buy the ETFs and expect they're going to give you this great leverage if you're interested in the stocks, you have to really be interested in them. The individual companies, if not, that's fine. They just invest in gold and silver. You can trade them, you can trade the ETFs at the same time.

Mike Maharrey: Yeah, yeah, absolutely. Well, and that's why we're grateful for folks like you who can help with that type of research and stuff because let's be honest, most people don't have the time to dig into the dynamics of the various companies and whatnot. But as you say, if you do it and you do it right, you can really leverage the price of gold and kind of increase the value of your investment. And you're also very active on X as well. So what's your X handle at the Daily Gold? Alright, well we'll send folks over there. We'll send folks to your website and hopefully they'll grab your book because I think it'll help with all of the charts and stuff that you do to be able to visualize some of the things that we've talked about today. So appreciate your work, appreciate you taking a bit of time out of your day to hang out here, and we'll have you back again soon to talk again as we kind of move forward into this new wilderness that seems to be developing.

Jordan Roy-Byrne: Sounds good. Thank you so much for having me