Technical Scoop: Spreading Unrest, Oil Highs, Oversold Metals

Excerpt from this week's: Technical Scoop: Spreading Unrest, Oil Highs, Oversold Metals

Gold and silver

Source: www.stockcharts.com

Misery, thy name is gold, silver, and the gold stocks. One would think that with everything going on – the geopolitical tensions, the domestic political tensions, and more – gold would be rising, not tumbling. But tumbling it is. Surging oil prices and rising inflation are hurting gold. The rush to U.S. dollars rather than gold is hurting gold. High interest rates are hurting gold as gold does not pay interest. Margin calls as AI stocks slump are hurting gold as gold stocks get thrown out and sales of gold and silver are needed to raise cash. The Fed is somewhat hawkish, and more interest-rate hikes could be in the offing.

This past week gold fell 4.1%, silver dropped 5.4% and is now down 24% in 2026, and platinum dropped 5.3%. The near precious metals were no better as palladium hit 52-week lows, off 6.2%, and is down 35% in 2026, while copper was off a small 0.9%. The gold stocks were hit as the Gold Bugs Index (HUI) dropped 8.3% and the TSX Gold Index (TGD) fell 9.3%. After holding gains for part of 2026, both the HUI and the TGD are now down on the year 3.7% and 1.9% respectively.

But divergences are present, suggesting that we could be nearing a bottom. Silver made new lows for the move. Gold did not. Not yet anyway. The gold stocks (HUI, TGD) are nowhere near their recent 2026 lows. Despite the hit that gold is taking, we view these divergences as positive. As well, the current sell-off is seeing all reach oversold levels. No, oversold is not a panacea for higher prices, but it is a sign that the sell-off could be waning.

Source: www.stockcharts.com

As we can see, both gold and silver broke below their trendlines. If we want to treat the pattern as a descending triangle, gold’s target could be $3,300 and silver $42. However, we view the current sell-off as a culmination of the steep correction (bear market) that started after the January 2026 high. We view this as a steep correction to the rally that started from the 2022 low near $1,613. A normal 38.2% correction is down to $4,082. For a 50% correction, it is $3,600.

Gold’s last major low was December 2015. A well-known 7.8-year cycle saw the next low in September 2022 exactly 7.8 years later. The next major cycle low would be due in 2030 with a range from late-2029 to mid-2031. We see this as a sharp wave 4 correction, up from the December 2015 low. A fifth wave is to come. Targets could be $6,500 to $7,700, although some are predicting even higher with $10,000 for gold mentioned numerous times.

First, however, we have to find the bottom of the current sell-off. The low may not yet be in and could come as late as December. To the upside, a break over $4,600 would be positive. But first we have to regain $4,300. Silver needs to break over $65, then $72 to suggest higher and confirm a low. Silver too appears to be making a wave 4 correction, up from a major low in 2020. If that’s correct, we could eventually see new highs above the January 2026 high of $121.64.

Source: www.stockcharts.com

The TGD closed the week at 802, well above its low of July 2026 at 692. As we noted, we view the strength in the gold stocks as a positive. Normally, when gold and silver are falling 25%, the stocks fall 50%. So far, the TGD is down only 38% at that July low and currently down only 28%. Gold is down 29% from its high and silver is down 56%. Through 900 and especially above 925 would be positive for the TGD.

Despite the steep correction, we remain positive on the sector. We are looking for a low in November. Seasonals are usually positive for gold starting in December to February/March. A catalyst might be the upcoming U.S. mid-terms where the potential for a contested, contentious election is high. Already, we are seeing the DOJ’s attempts to block the results of elections (Alaska). (https://www.nytimes.com/2026/10/23/us/politics/justice-dept-alaska-senate-race-sullivan.html)

Surprisingly the US$ Index has not jumped higher recently despite funds coming in from the EU. The US$ Index was flat this past week. There was no clear-cut winner from the other currencies. All are floundering. Purchasing power in all currencies is falling.

Source: www.stockcharts.com

Copyright David Chapman 2026

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