Technical Scoop: Chaos Outlook, Market March, Cycle Vulnerabilities

Excerpt from this week's: Technical Scoop: Chaos Outlook, Market March, Cycle Vulnerabilities

Gold and Precious Metals

It’s been a golden year. And more recently we’ve heard regular singing of “silver bells, silver bells.” Gold is the canary in the coal mine. It has been a source of wealth, money, and currency for at least 3,000 years. The world has at times been on a gold standard or the dominant form of money was gold coins. Think of the Roman solidus (gold coin) that was introduced under the Emperor Constantine the Great, serving the latter part of the Roman Empire and through the Byzantine Empire from roughly 270 AD to 1450 AD or 12 centuries.  Gold standards existed in various forms after that, a gold standard only existed in various forms from 1819 with a classic period from 1880 to 1914. WW1 changed everything and after that the gold standard sputtered.

Gold is money and in times of economic uncertainty, geopolitical and domestic political uncertainty, and massive debt, the go-to asset is gold. It’s real; Bitcoin is virtual. All others – paper money, currencies, stocks, and bonds are just that – fiat paper. Gold is up about 62% in 2025, its best year since 1979. Bitcoin is down over 3%. Gold has no liability. It can’t be destroyed.

Gold’s decennial cycle is not great for clues as gold has only been free trading since 1971. One could start with 1968 when the London Gold Pool collapsed. Three years later, in August 1971, President Richard Nixon took us off the gold standard. Years ending in 6 show 3 up and 2 down. So, not great clues.

Our best-known cycle is Merriman’s 7.8-year cycle (www.mmacycles.com). This was last seen in 2022 and, if it’s correct, we are in the up cycle of the current 7.8-year cycle. Lows can occur roughly every 31 months and we are due for one now or into early 2026. To date, we haven’t confirmed a low, last seen in October 2025 at $3,915. While we are up roughly $365 from that low, we can’t confirm a low until we at least make new all-time highs above $4,381.

10-Year Gold Cycle

Annual % Change in Gold

Year of Decade

* To date                                          

Source: www.stocktradersalmanac.com

If gold has been spectacular in 2025, silver has been more so, up roughly 112% in 2025. No wonder some are singing “silver bells, silver bells.” Silver, like gold, may have formed its cycle low in late October 2025 at $45.55. Since then, silver has soared to new all-time highs finally taking out the nominal high of 1980 and 2011 near $50. The problem with silver soaring to new all-time highs is gold has not yet made new all-time highs, although the stock indices (Gold Bugs Index (HUI), TSX Gold Index (TGD)) did make slight new all-time highs.

Both gold, silver, and the gold stocks usually enjoy a positive seasonality period that can last into February/March. Are we on that cycle? We could be, but that needs to be confirmed. Nonetheless, we expect the precious metals sector (gold, silver, platinum, near PMs palladium, copper) to enjoy another up year in 2026. Will it be as good as 2025? That is to be determined.

Our long-term chart of gold on the next page shows one of the most compelling cup and handle patterns we have ever seen. Initial targets were around $3,600, now surpassed. The next target is $4,620, which could be hit in Q1 2026. As we said, it has been a golden year and our expectations for 2026 are that we could have another one. Oh yes, and silver bells too.

Gold 1970–2025

Source: www.stockcharts.com

Long-Term Cycles for Gold

Source: www.mmacycles.com

Copyright David Chapman 2025
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DisclaimerDavid Chapman is not a registered advisory service and is not an exempt market dealer (EMD) nor a licensed financial advisor. He does not and cannot give individualised market advice. David Chapman has worked in the financial industry for over 40 years including large financial corporations, banks, and investment dealers. The information in this newsletter is intended only for informational and educational purposes. It should not be construed as an offer, a solicitation of an offer or sale of any security. Every effort is made to provide accurate and complete information. However, we cannot guarantee that there will be no errors. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the contents of this commentary and expressly disclaim liability for errors and omissions in the contents of this commentary. David Chapman will always use his best efforts to ensure the accuracy and timeliness of all information. The reader assumes all risk when trading in securities and David Chapman advises consulting a licensed professional financial advisor or portfolio manager such as Enriched Investing Incorporated before proceeding with any trade or idea presented in this newsletter. David Chapman may own shares in companies mentioned in this newsletter. Before making an investment, prospective investors should review each security’s offering documents which summarize the objectives, fees, expenses and associated risks. David Chapman shares his ideas and opinions for informational and educational purposes only and expects the reader to perform due diligence before considering a position in any security. That includes consulting with your own licensed professional financial advisor such as Enriched Investing Incorporated. Performance is not guaranteed, values change frequently, and past performance may not be repeated.