Gold and Silver corrective pullback – or peak?

At Tricio we focus on economic cycles, market structures and investor behaviour in order to help clients navigate markets with a medium to long-term investment outlook.

We often use charts as a gauge of investor sentiment and behaviour. The chart below is the long-term chart of gold from the 1999 lows (in USD terms, weekly, semi-log with 13 and 50-week moving averages). Gold prices have come a long way, and no doubt gold bugs are looking for a $10,000 per oz. print in this cycle. The story that boosted prices above $5,600/oz. so far in this bull run is that central banks and government money printing machines are debasing fiat currencies, which makes gold a safe store of value. Key countries (China) seeking to evade potential sanctions are building gold reserves, boosting demand. The laws of economics (supply and demand) are seen as not really applying as gold can be an emotional investment for some. If it is good enough for dragons to hoard and dwarves to fight over, who are we to argue? 

The shorter term chart below is worth examining though. The 13-week moving average is being eroded by selling pressure and the gap to the 50-week moving average ($3,950/oz. area) is pretty high. There is a rising support line (demand) below this which will be important to watch if approached. Big picture? We still believe, even in gold, that in commodities high prices cure high prices. If the US and Israel attack on Iran and the potential fallout in this pivotal region shows signs of escalation and gold still can’t rally, then something else is going on.

A turn below the 50-week moving average and rising line beneath it would be a big signal for a bigger tumble back to the $2,000/oz. support area. A bit early for this, but it may bear watching.

What about silver? Prices more than doubled over the last year as the chart below shows. The run higher may have peaked and a sustained turn below the $64/oz. area would set a new low for 2026 and set up the $50 to $49/oz. area for testing (former high zone and just below the 50-week moving average near $53/oz.). A break below this area would set up $40/oz. and below again, back to the cellar for the ‘poor man’s gold’. Again, this is early days to be calling time on this rally and it may just be a correction. But here too, if WW3 is potentially at hand and the precious metal is falling, this is not great news for silver bulls. If the $64/oz. area can hold up then silver fans may continue to hope for a push back to $100/oz. for $120/oz. and higher probes again. Again, high prices usually cure high prices in commodities, see if precious metals come back to earth over the coming months.

For further information on our research insights and our ‘Ask a Buddy’ CIO service please contact us at info@tricio-advisors.com 

Gerry Celaya,

Chief Strategist