Technical Scoop: Precious Swoon, Upward Oil, Rates Diverged

Excerpt from this week's: Technical Scoop: Precious Swoon, Upward Oil, Rates Diverged

Gold and silver

Source: www.stockcharts.com

If you see gold traders jumping out of windows, don’t worry. They always do that at bottoms. We’re sure a few might have been doing that this past week as both gold and silver plunged to new lows for the down move since that January 2026 top. Gold is now down about 31% from that top. Silver is worse, down about 60%.

In the financial crisis crash of 2008, gold fell 34% while silver dropped 60%. The gold stocks were massacred as the Gold Bugs Index (HUI) fell 71% and the TSX Gold Index (TGD) dropped 60%. This time? At its worst, so far the HUI fell 41% and the TGD was down 38%. The remarkable thing is that while both gold and silver have made new lows for the move both the HUI and the TGD remain nicely above their recent lows. A divergence?

We’re seeing a lot of fear in the market. One thing we have noted is in 2022, just before the midterm elections, gold and silver made their bottom. The bottom was actually in late September with a secondary low in late October. Nonetheless, it marked the low for the move and gold rose for the next two and half years. Is that a given? No. The wild card is the midterms. If the Democrats win big, that might give the stock markets the signal to continue their sell-off. That in turn could drag the precious metals market down with it.

October was a scary month for gold and silver. Gold fell 6.8% but silver was scarier, down 18.7% and now hitting that crucial $50 support zone. The HUI fell 12.2% while the TGD dropped 13.2%. Scarier still was platinum, down 16.6%, and palladium, down 19.5%.

That was the week too as gold fell 2.9%, silver was down 8.7%, the HUI was off 3.9%, and the TGD was down 4.2%. Platinum fell 7.6% and palladium dropped under $1,000, off 6.4%. Copper was the star. It was flat last week and off only 1.1% on the month while making a record high at one point. Copper remains our leader. The others will follow.

Source: www.stockcharts.com

We can’t help but notice that gold and silver are oversold as measured by the RSI indicator. Readings under 30 are oversold. The HUI and TGD are close but are not yet under 30. Our chart of gold suggests we could fall further to the lower trend line, but silver appears to be making a falling wedge triangle (bullish) and is at/near support. While we closed just under $50, we view the zone as major support. Gold is also at support, but recognize it could fall towards $3,500/$3,600. The gold stocks (HUI, TGD) are also at support levels. We also appear to be completing what could be a larger ABC pattern to the downside.

We are encouraged by the outperformance of the HUI and TGD vs. gold and silver. It is essential that the gold stocks lead if we are to come out of this current malaise. The recent sell-off appears to be more of a response

to the sell-off in the equity market then it is to anything fundamentally wrong with gold and silver. The currencies did nothing this past week with most of them up or down marginally.

Fundamentally, with monstrous debts and budget deficits coupled with continued buying by the central banks as they sell U.S. treasuries and buy gold, this is an encouraging sign that this sell-off is just temporary. Given the huge run-up from 2022 to 2026 (gold gained almost 200% while silver leaped almost 300%), it shouldn’t be a surprise we’ve been hit with an overdue correction. Of course, for the gold bugs it’s a disaster. Maybe they should have better locks on their windows.

Source: www.stockcharts.com

Read the FULL report here: Technical Scoop: Precious Swoon, Upward Oil, Rates Diverged

Copyright David Chapman 2026

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