Dana Lyons – Gold Volatility and Correction, A Technical Outlook & Trading Strategy
In this KE Report Daily Editorial, Dana Lyons, fund manager and editor of Lyons Share Pro, joins me to discuss the recent correction and rising volatility in gold, silver, and mining stocks (GDX, GDXJ, SIL). Dana explains how traders should adapt as the metals shift from a parabolic uptrend into a more volatile consolidation phase.
Key Topics
- Risk Management in a Correction – Why trimming positions into strength and rebalancing exposure helps preserve gains.
- Volatility Signals – The spike in the Gold Volatility Index (GVZ) warns of a turbulent trading environment ahead.
- Technical Roadmap – Using retracement levels and patience to identify when the correction may end.
- Market Outlook – Despite metals volatility, Dana’s models remain bullish on equities, led by semiconductors, biotech, and select international markets.
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While I think silver could very well make slightly higher nominal new highs, I personally don’t believe the leg up into the triple digits will begin until it tags its 50 week EMA. (I would prefer is accomplishes that by maintaining itself within a high range (say $55 to 45) for as long as it takes the 50 week EMA to reach the bottom of that range.) I think such a price consolidation will be much more supportive of a move in silver to say $120-150 by the end of 2026. I wouldn’t bet the farm on my prediction though. I strongly agree with your overall ultrabullish sentiment. Get long and stay long.
Under these circumstances, we might be lucky to close a week under the 10 week EMA before heading higher. That’s what happened in 2011 under relatively benign circumstances. In that run, silver closed above the 50 week EMA 82 times straight. Today we’re at 28 weeks.
https://schrts.co/UAfiMkCk
2010-11
https://schrts.co/jNtwjcHx
I guess as a bull who desires the smoothest and highest ramp in silver possible, I would prefer avoiding a repeat of 2011. Personally, I think it would be healthier for a pause here for some time for the 200 day EMA/50 week EMA to catch up to price. Of course, silver is going to do whatever it wants and doesn’t give a hoot about my preferences.
I am going to go out on limb and say silver’s next major target is going to be $100-120 in 2026 and that that peak will coincide with the start of a major crash/severe correction in the US stock market, which could see silver come all the way back down to test its $50 breakout. At that point, I expect some event, be it Fed stimulus or whatever, that will yield the ultimate move higher, which I have no idea on its limit. I think that’s when we get our 1979 rally. I think $200 is a conservative target.
(I should also make the caveat that if silver decides to take a quick dump down to the 150 DMA within the next month or two, the process of breaking back above $54 is going to be a longer process compared to the high consolidation scenario, so $100+ probably won’t get hit until early 2027.)
It might rhyme with 2011 but it won’t be a repeat. That much is already clear. We are in an acceleration phase much more similar to the late ’70s.
This silver-gold chart should make it clear that we haven’t seen anything yet:
https://schrts.co/TPRnHFZt
The catalyst for the breakout move will probably be the ending of the (farcical) government shutdown.
Silver:gold hit resistance that goes back 5 years (chart above) but it also hit resistance that goes back more than 14 years:
https://schrts.co/BRnnHuPC
OOPS………….. 10:1 …..GSR…….. IN INDIA……………. NEW BALL GAME
Do you have a link! DT
It’s not what it seems but still bullish implications for silver everywhere.
India Unleashes Silver as Bank Collateral with 10:1 Gold-Silver Ratio, Boosting Global Money Role
https://www.jpost.com/business-and-innovation/precious-metals/article-871338
Can never tell what 1.4 BILLION people will do in INDIA….
My opinion is that gold and silver are gonna remain in a sideways consolidation until the first week or two of December. For me it’s sidelines here intermediate correction and I would favour Gary savages post yesterday. I’m in line with what he’s saying as well.
Silver as spanky said $52 ish at the high end and possibly down to the $42/$44 area. Although $44-$46 is a good spot. I think one last mini shake and bottoming in December with a fake spike in November. Last opportunity to get onboard them gone.
On the larger note, I’m of the opinion that we still have 4 to 5 years on this bull market with a blow off phase somewhere in 2030/2031 with the US dollar hitting rock, bottom, housing market, collapsing, specifically here in Canada. And then multiple years of stagflation.
I do not buy the motion of once gold hits its peak that will remain high for a long time as a currency backed or standard. With gold that those elevated prices would be living in hyperinflation who could afford gold what I do think is gold could go to say 8000 or $12,000 an ounce at its peak and then return back down to $2000 as a norm, but that’s very difficult to predict.
As a last note there may be some buying opportunity in the miners come end of November beginning of December. Keep some dry powder.
For the high consolidation scenario, I personally think that once the low end of the range in silver is established (perhaps as soon as next week), we won’t retest that low until possibly March or April (again whenever the 50 week EMA catches up to the low end of the range). The test of the 50 week EMA should come as a relative quick but very scary multiweek dip after a very flat and tight consolidative period. This is going to make market timers like Gary Savage pull their hair out. The ultimate kicker would be some sort of headfake higher (perhaps to a slightly higher nominal high) before that final move down to touch the 50 week EMA.
Back in the late 1970’s and early 1980’s I had a good paying job and I only had a mortgage of $32,000 when Paul Volker The Chairman of The Fed raised rates astronomically to squeeze speculation out of the system. Now it is so ridiculous because it doesn’t matter what your income is it is worth less by the day and mortgages are 20 or 30 or 40 times that high for the working man who wants to own a home.
This is LA LA Land and if you can’t see it then you won’t see what is going to happen. DT
There can be nothing remotely resembling free market capitalism when the world is forced to pretend that debt is money.
https://wtfhappenedin1971.com/
Comments concerning Corrections in the General Markets vs The Metals Markets over the last 20 years:
Ranges from BS to No Comment.
HEY GLEN………. you might want to read the link , I posted concerning INDIA
HEY DT…….. link posted
Hi Jerry, that is bat sh*t crazy! DT
thank DT.. for the reply….
I think I am going to buy more PHYZ…silver…
Buy PHY. Silver …… Thank me next year.
thank you…….. 🙂
PHYZ……
This is a good time to point out that silver would need to be 46% higher to match its 2020 high versus gold, 168% higher to match the 2011 high and 544% higher to match its 1980 high vs gold. And those numbers are based on gold staying where it is at the moment.
Stay focused, buy dips.
I remain bullish unlike previous highs for gold. This correction might last longer then some think but it won’t matter; in fact it would be healthy. We’re seeing a stair step move higher for a lot of these PM stocks with the blow off phase a considerable ways away. I also believe we might ultimately see a lower industrial/gold ratio and we have a long ways to go regarding that. There are multiple charts that speak to the fact this PM bull is not over and this time the situation globally as far as a coming economic reset is so different then past gold peaks. This time it is different so we are going to be able to add to stock positions on this pull back. Love this bull and don’t get shaken out of it.
The same fork that marked the 2020 top for gold also marked this week’s top…
https://schrts.co/BBgMqUgm
The same fork that marked the April low for Silver:Gold also marked this week’s top…
https://schrts.co/yzkVFtjF
I posted this on the last day of August and silver shot up 37% in the 6 weeks that followed:
Monthly silver breakout:
https://schrts.co/MYuYnpvT
This pullback, while violent in speed, has been tame and nothing but healthy for silver. The high for the year will now probably crush my earlier target of “around $60”. And if it doesn’t happen by yearend, that’s ok, because it will probably be well beyond $70 by May.