Technical Scoop: Dollar Increase, Materials Smacked, Cut Remote

Excerpt from this week's: Technical Scoop: Dollar Increase, Materials Smacked, Cut Remote

Gold and silver

Source: www.stockcharts.com

It was a miserable week for the gold bugs – on Friday especially, after the release of the job numbers. The higher than expected job numbers set off alarms that the economy is growing, that they won’t have to cut interest rates, and bond yields rose. All this makes holding gold, which has a cost of carry, less appealing and as a result the sell button was hit. Friday’s collapse in the stock market didn’t help. When the stock market catches cold, gold and gold stocks catch pneumonia.

We’ve seen this picture before, most notably during the 2008 financial crisis and the 2020 pandemic panic. Note that the S&P 500 fell 52.3% in 2007–2009 while the Gold Bugs Index (HUI) dropped 71.1%, all in 2008. In 2020 the S&P 500 fell 35.4% during the March 2020 panic while the HUI fell 45.3%. We’ve seen the same phenomena during other market declines. The good news is, despite the drop for the HUI, gold and the gold stocks recovered first and we’re soon at new all-time highs. Maybe there is a pattern.

However, Friday was a bear raid. If there is one concern, it is that gold, the HUI, and the TSX Gold Index (TGD) all broke below and closed below their 200-day MA’s. Silver did not, but it’s getting close. That the US$ Index had a big up day also weighed on the gold market. U.S. treasury yields ticked higher.

The declines on Friday were a bit rollicking. On Friday, gold fell 3.2%, silver was down almost 8%, while the TSX Gold Index (TGD) fell 8.0% as well. On the week, gold was down 5.0%, silver was off 10.5%, the HUI was down 11.7%, and the TGD was off 10.4%. Platinum was hit, down 7.9%, palladium fell about 10.0%, while copper fared the best, down only 2.0%. Not helping was a stronger US$ Index and thoughts that the Fed might raise rates at the June FOMC. Given it’s Kevin Warsh and there’s pressure to keep rates down, we doubt that will happen.

Source: www.stockcharts.com

We won’t pretend that the fall under 200-day MA is not of concern. It is. We also busted what appeared to be a forming symmetrical triangle for gold, except that we broke down, not up. All have become quickly oversold with RSIs in the low 30s but not yet under 30. We could argue that the symmetrical triangle was actually a descending triangle. If that’s right, gold’s target could be $3,000, another $1,000 lower. The TGD’s target is down to around 500. One reason we find all that spurious is, in theory, silver could be wiped out. The odds of that happening are zero.

We are also entering a seasonal period more friendly to gold. However, that could still leave our final low off until July. Nonetheless, mini bears are now in place. The daily trend for all is pointed down while the more important intermediate trend is neutral. Another bad week and that could turn down too. The long-term trend remains up but weakening.

Should we be concerned? Yes, but some keys might be follow-through this coming week. Weak follow-through would be encouraging but not necessarily signal the end of the decline. What they might hope for is more talk from the White House that peace is at hand. It wouldn’t be surprising, given the president’s penchant for whipsawing the market and his desire for lower oil prices, a higher stock market, and lower bond yields.

Gold is down almost 23% from its all-time high, silver down 44% and the TGD off 29%. All bear markets. That’s the bad news but the good news is gold is up 168% from its key 2022 low, silver up 287%, while the TGD is up 258%. Is the glass half full, or half empty?

The decline this past week was a bit scary. However, we remain optimistic that we’re staying in a long-term bull market and this has just been a nasty correction following the big run-up in 2022–2026. Certainly, raids like this push all the weak longs out of the market.

For those interested in more detail than we provide, Ed Steer’s weekly column is an interesting read. (https://silverseek.com/article/brutal-bear-raid-golds-200-day-moving-average-falls.) It is, however, quite technical and lengthy so it is not for everyone.

Source: www.stockcharts.com

Read the FULL report here: Technical Scoop: Dollar Increase, Materials Smacked, Cut Remote

Copyright David Chapman 2026

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