Technical Scoop: Oil Damage, Precious Flounder, Materials Outperform

Excerpt from this week's: Technical Scoop: Oil Damage, Precious Flounder, Materials Outperform

Gold and Silver

Source: www.stockcharts.com

With all the turmoil going on, you’d think that gold and silver should be soaring. Except they’re not. A rising US$ Index and rising bond yields are sending gold and silver down, not up. Both are negative for gold and silver prices. With oil prices rising above $100 it underpins global inflationary pressures. That’s going to make things interesting at this week’s FOMC. Will the Fed hike rates, lower rates, or stand pat? The consensus is they will stand pat. But there are pressures for a hike (inflation) and pressures for a lowering (job numbers). In other words, stagflation: rising or sticky inflation coupled with a slowing, even recessionary economy.

This past week gold fell 2.8%, silver dropped 4.4%, and platinum fell 5.5%. Near precious metals saw palladium down 5.8% and copper off 2.8%. The gold stock indices weren’t spared as the Gold Bugs Index (HUI) fell 7.3% while the TSX Gold Index (TGD) dropped 6.2%. Despite the drop, the two remain up on the year: HUI +14.2% and TGD +11.6%. One area that saw a jump thanks to energy prices rising was the CRB Index, which gained 8.7%. The CRB Index is up 21.2% in 2026. Since the outbreak of war, the CRB is up 17%.

The most dramatic reason for gold to falter is the rising US$ Index that gained 1.6% this past week, closing over the key level of 100 (close 100.47). That could signal more price increases ahead. Currencies fell with the euro down 1.7%, the Swiss franc off 1.9%, the pound sterling dropping 1.3%, and the Japanese yen falling to 52-week lows, down 1.2%. A rising US$ Index is not good for gold prices.

What’s key for gold prices coming up is the FOMC meeting on March 17–18. The real surprise would be for a rate cut, which could spur gold prices higher. We’d put greater odds on that happening than a hike in rates. Pressure is still emanating from the White House to cut interest rates. But Warsh doesn’t take over until June 2026. Note Warsh has still not been confirmed by the Senate.

Despite the setback, both gold and silver and the gold stocks remain in bull markets. Gold has some support at $4,900, but what’s key is the recent low near $4,400. Silver has support between $69 to $75, but a drop under $69 suggests a possible test of the major breakout level of $50. That could also spell the end of the bull market. We doubt it could happen, but it can’t be ruled out. To the upside, gold needs to regain $5,325 and silver above $108 to potentially see new highs. Ditto for the gold stocks. The HUI has support at 765, but a drop under there could target 680. The HUI needs to regain above 934. It’s the same for the TGD; it has support at 880 but under that level a drop to 800 is possible. The TGD needs to regain 1,060 to suggest new highs. Not only have the major gold stock indices been hit but the junior market is also suffering, where many bids seem to have just walked away. Nonetheless, the gold stocks have been undervalued for quite some time and today they are still undervalued.

What’s encouraging is that gold is still above $5,000. But will it last? Gold needs some calming from the US$ Index. In any case, the real focus this week is on the FOMC.

Source: www.stockcharts.com

Read the FULL report here: Technical Scoop: Oil Damage, Precious Flounder, Materials Outperform

Disclaimer

David 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. Although Artificial Intelligence (AI) may be deployed from time to time, AI output is monitored and adjusted, if necessary, for accuracy.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.