Technical Scoop: Fiscal Spark, Bank Bullets, Gold Trend

Excerpt from this week's: Technical Scoop: Fiscal Spark, Bank Bullets, Gold Trend
Gold and silver

Source: www.stockcharts.com

Inflation tensions are rising, and that’s bad for gold. It’s all because of the Middle East and the war with Iran. Things may be quiet for now, but they threaten to flare up again. The unresolved meeting between Xi and Trump went nowhere, spooking the oil market to the upside. As a result, bond yields rose, the US$ Index jumped while gold, silver, and the gold stocks were smacked to the downside. Yes, the stock market fell as well, but it was the metals that were hit harder.

On the week, gold fell 3.8%, silver was down 5.5%, and platinum dropped 4.2% while of the near precious metals, palladium fell 4.9% and copper hit new highs before succumbing, in the end down a modest 0.1%. Copper rules. The gold stocks were smacked, as we note on the next page. The junior developers and near producers were also beaten down after rising earlier. What goes up also comes down, sometimes harder and faster.

What’s concerning is that what we thought was our E wave down of a larger ABCDE-type correction may not yet be finished. If correct, that support at the recent low of $4,500 may not hold and we could fall further to $4,300. Below $4,300, we could be breaking down with a scary projection of a fall to $2,800. We doubt that will happen, but we need to point it out.

It wasn’t as if rising bond yields in the U.S. spelled a drop for gold prices, but bond yields were jumping worldwide. Crude oil prices are rising and threatening to break out. If gold in US$ fell 3.8%, we note gold in Cdn$ fell 3.2%, gold in euros fell 1.0%, gold in Swiss francs dropped 0.9%, gold in pound sterling was off 0.5%, and in Japanese yen down 1.8%. The stronger US$ helped buoy gold in other currencies.

Source: www.stockcharts.com

Silver, like gold, was smacked this past week. However, silver had appeared to break out. Now we are not so sure. A break back under $75 would be negative. A break under $64 would be quite negative; however, we expect that silver should test $64 but generally hold. We note on the recent run-up silver broke out, while gold did not. Silver made new highs for the current move; gold did not. A negative divergence? Nor did the gold stocks make new highs.

A concern is the US$ Index, which was up 1.5% this past week. Is it making a rounding top or a rounding bottom? The rounding bottom is more relevant to gold. A breakout above 101 could translate into a move to 106. A breakdown under 95 is favourable to gold, but there is a lot more work to do to see a break under 95 than a break above 101.

The reversal this week once again suggests our low may not occur until June or even July. Billionaire Eric Sprott has committed upwards of $3 billion, based on the assumption that gold will rise. He has a history of being right. Early maybe, but ultimately right. His potential targets? $200 for silver and $10,000 for gold.

Source: www.stockcharts.com

Source: www.stockcharts.com

As with gold and silver, the TSX Gold Index (TGD) could be poised to break down. Under 850, things break down. Under 810, a bear market could get underway. It was not a friendly week for the gold and silver stocks. The TGD fell 6.5% while the Gold Bugs Index (HUI) dropped almost 7.0%. Since that top in January near 1,066 we note an A wave down, a B wave up to slightly new highs, a C wave down, and a D wave up, and we now appear to be working on what could be incomplete E wave down. We thought we were preparing to break out to the upside. No longer. A breakdown now appears more likely. The triangular pattern projects down to 511, although we don’t believe that’s realistic. But a drop to the minimum of 770/775 is possible. Obviously, that recent low near 771 is important. We’d prefer not to see that taken out as it could signal more losses. Nonetheless, there is some support between 770 to 820. Only a break above 955 could set us on an upward trend once again.

Read the FULL report here: Technical Scoop: Fiscal Spark, Bank Bullets, Gold Trend

Copyright David Chapman 2026

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