Technical Scoop: Impact Spread, 1970s Rhyme, Oversold Metals

 Excerpt from this week's: Technical Scoop: Impact Spread, 1970s Rhyme, Oversold Metals

Gold and Silver

Source: www.stockcharts.com

This is a miserable time to be a gold bug. If there is light at the end of the tunnel, we note that gold, silver, and gold stocks were hammered down during the 2008 financial crisis and again during the pandemic. For gold stocks, especially the small junior developers/near producers, the bids just fade away. As a result, they fall into a vacuum. Note that during the 2008 financial crisis gold fell 34%, silver was down 40%, the Gold Bugs Index (HUI) dropped 71%, while the S&P 500 fell 35% (and ultimately 55%). Gold, silver, and the gold stocks bottomed in October and were the first to rise.

The 2020 pandemic saw a similar occurrence. Gold fell 15%, silver was down 38%, the HUI was off 45%, while the S&P 500 dropped 35%. And that was all in one month – March 2020. Once again, gold, silver, and gold stocks were the first to begin to rally. New highs were seen a month later in April.

This time around gold has fallen from its high by 20%, silver is down 44%, the HUI is off 31%, while the S&P 500 has fallen only 7% so far. The precious metals are in a bear market. Stocks are not even in correction territory -yet. The DJI and NASDAQ are close.

Naturally, we can’t say we’ve bottomed yet but given oversold conditions a rebound may be in the offing. We’ve noted some brave souls are nibbling at buying gold, silver, and gold stocks. On the week, gold fell 10.4%, silver dropped 15.7%, platinum fell 5.0%, while the near precious metals saw palladium off 9.2% and copper down 6.6%. The Gold Bugs Index (HUI) dropped 14.7% while the TSX Gold Index (TGD) was off 14.3%. The CRB Index, which is dominated by energy, fell only 0.4%. The CRB also made 52-week highs.

We don’t want to panic here. It may turn out to be the proverbial buying opportunity. However, for confirmation we’d need to see gold back over $5,000, silver over $90, the TGD over 1,000, and the HUI over 902. Gold has fallen to the 100-day MA and could be making a double bottom (not confirmed). Silver bounced off the 165-day EMA, while the TGD is just above trendline support, just under the 165-day EMA and not far from the 200-day MA (734). The RSIs are in oversold territory, an area often associated with lows but not guaranteed. Even the TSX Venture Exchange (CDNX), which is dominated by junior gold and metal stocks, fell 10.5% this past week and is down on the year by 7.7%, although it also hit the 200-day MA support.

So far, all are making what appears to be an ABC-type correction. But we don’t yet know whether this C wave has bottomed yet. The ABC correction could also morph into an ABCDE-type correction. On any rebound, failure to make new highs would be a negative sign and signal this isn’t over yet. Seasonally, gold is often weak into June/July before making a low and beginning a seasonal rise into September/October. On that basis, gold bugs will just have to be patient.

Source: www.stockcharts.com

Right now, the charts don’t look good. The correction was overdue following a record run. From a significant low in 2022 there was only one correction of any size in April through October 2023 where gold fell about 13%. Overall, from that September 2022 low gold rose almost 250%. So, is the glass half full or half empty? Gold is still up 69% since 2025. The TGD is up 132% since 2025, even after a 30% pullback.

Source: www.stockcharts.com

What to watch for going forward? Gold, silver, and the gold stocks have been beaten up and bloodied. But overall, they are still in good shape. However, the reality is once we start a rebound, we need to eventually see new all-time highs to confirm that the bottom is in and a fifth wave up is underway. We remember that, after the 2011 high, 2012 saw a back-and-forth market that failed to make new highs. Then came that devastating drop in April 2013. That is something we’ll want to avoid this time around.

Read the FULL report here: Technical Scoop: Impact Spread, 1970s Rhyme, Oversold Metals

Copyright David Chapman 2026

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