Gold is a leader in several ways, but one way in particular could be the pathway to profits in the coming years
As gold appears likely to enter its first notable correction since the consolidation that came after its price was overdone in the spring…
…it is time to look out ahead toward what the big 2025 rally in gold has meant for forward-looking analysis.
First, let’s talk about the Silver/Gold ratio. We have projected a risky caution point right here with the SGR’s long-term trend down, but its ‘price’ having spiked to an extreme within the downtrend.
A side note that this real-time daily chart is not broken, so we should also consider that the PM correction could just be a “flash” quickie prior to earnings season (and FOMC).
As the Silver/Gold ratio corrects, it is all well and good, making sense with a precious metals correction.
But what is out ahead, in the 2026 macro? Silver could very well bust out vs. gold for real, as its heavier industrial utility would come into play, if past is prologue. “Past” being commodities following through the doorway that gold kicked down.
We are currently on an “interim” disinflation theme. But the bigger picture, as indicated by the broken long-term yield downtrend on the Continuum, is indicated to be inflationary. First we have to eliminate the last of the inflation bugs, then we go full on INFLATION trades. That’s the plan, anyway.
During a cool down silver leads gold to the downside amid the disinflationary pressures and perhaps (certainly no sure thing), a Goldilocks tout on the macro.
But when we emerge from that interim phase, I expect the inflationary play to fan out into the broader commodity areas, beyond the precious metals and “critical minerals” plays that have manifested so far. For example, I saw a chart on X shifting a chart of gold and a chart of oil by some amount of time (2 years as I recall, but don’t quote me on that), and the analog – with that time lag – is pretty darn solid. Gold has been rallying for about 1.5 years since breaking out above 2000 in 2024!
Then there is the Gold/GYX (gold/industrial metals) ratio that we discussed in a recent report, update or in-week notes. It is at an extreme. If you don’t think the world is ending, if you don’t think cyclical inflation (globally) is done, then you might think that this represents a coming buying opportunity in broader industrial commodity related stocks.
I “think” that the play is already happening because nominal GYX is poised bullish on the big picture. We have not viewed this chart in some time, but it has held the key support level we noted a couple years ago.
Industrial metals, energy and the specialty or “critical” commodities will be a focus going forward, again, pending a current disinflationary, possibly Goldilocks, phase.
Gold’s big spike upward may well have been the signaler that the play is on. This would of course alter our heretofore view of gold and gold miners as unique (amid counter-cyclical forces) going forward.
More to come. But much like the semi-paranoid look-ahead we had in NFTRH 885 and yesterday’s update, we need to continue looking forward and interpreting, especially given a macro that is changing and shifting. This look-ahead could be longer-term and a next big wave to be a part of.
