Precious Metals; Phase 1 Completing, Get Ready For Phase 2

After the rally completes, a precious metals pullback is likely upcoming, to be followed by resumed broad market leadership

How We Got Here

2025 was a stellar year for the precious metals, as gold bucked the bearish market trends of late winter and spring, followed by the miners and eventually, silver. After silver wrestled leadership from gold it was up up and away for the precious metals, critical minerals and other commodities. Right into a very high risk situation. Risk was realized, as expected.

Then came the anticipated “multi-month correction”. It lasted about 5 months. Check.

Then came…

2026 Bull, Phase 1

Since early July we anticipated a tradeable bounce or rally in the precious metals off of a deeply oversold situation. Our primary indicator being the 200 day moving average (green line) of the BPGDM, which has trended down to a higher low, as expected.

By ignoring the noise of the spiky indicator itself, we were able to smooth out a view of an extremely low risk situation, rather than chasing the up and down spikes of the correction. Even as BPGDM is once again spiking and the precious metals complex has likely registered its ultimate lows, the SMA 200 will continue to trend down and is expected to eventually carve out a higher low to the 2024 low. This has been our plan since January and it is on target.

On August 5th the rally finally announced itself clearly. Gold ramped, silver ramped and the Silver/Gold ratio (SGR) continued to hammer out a pattern from which it could eventually rise (and lead Phase 2 of the 2026 bull).

While I think the odds are that the SGR will pop toward the (orange) SMA 200 soon, its real leadership move will likely be reserved for Bull Phase 2 (see below), which is expected to see many commodity and resources stocks follow the precious metals.

Currently, we are managing the gold stock rally closely in NFTRH, using detailed TA (Fibonacci retrace levels and chart resistance) for upside targeting of the HUI Gold Bugs index. We are also managing parameters for the little pullback currently in progress.

Here let’s review GDX with respect to that little pullback, and reserve upside targeting for NFTRH Premium. With GDX thus far holding the SMA 200, we can allow for the immediate lower gap at 78.86 to fill without being overly concerned about the ongoing rally, which started off of a positive RSI divergence, much like the major correction began off of a negative divergence.

Below the SMA 200 and the support area at 84-87 we’d have to consider whether the rally is ending sooner – at the lower of our two objectives, again using the HUI index – rather than later (at the higher target). But as it stands now, it’s rally still very much ‘on’.

As the summer winds down, it is the broader stock market that is of more concern than the precious metals. To review, the Gold/SPX (GLD/SPY) ratio appears to be bottoming right where we expected, at a higher low to the previous major low.

Gold, high relative risk to low relative risk. That has been the story of 2026 so far.

In the Interim

Stock market seasonal averages turn bearish into September. An interesting view of the VIX seasonal by way of John Authers lines up with what we’ve been discussing in NFTRH of late. The party is likely to be interrupted before a Q4 buying opportunity in broad markets.

Bloomberg

2026 Bull, Phase 2

As per the ‘low relative risk’ of the Gold/SPX ratio, the BPGDM’s 200 day average and other macro indications in play, it’s a good bet to favor gold, gold stock and silver leadership with respect to a Q4 buying opportunity.

Throughout 2026 so far, after calling high risk in the precious metals at the start of 2026 (personally, I mostly sat out the correction, with a few long and short trades) our theme has been diversity. We have stayed in tune with the market’s internal rotations (e.g. out of Semiconductors, into Biotech, into Software, partially out of Software, back into Semiconductors, and more… it’s a lot of work, I grant you) to profitable effect in 2026.

I am still long quality gold stocks (with a bias toward Royalty companies). But the best rotation – after an interim rough patch – is expected to go back to gold, silver and the miners. NFTRH will be gauging the process every step of the way and I’ll personally be managing cash, taking profits (broad markets, including gold stocks) on high fliers and redistributing to new rally candidates until the music stops.

When the music starts again I expect to be aboard the precious metals, locked and loaded into 2027. That’s the way the macro appears to be shaping up at this time.