Gold is down 250 bucks from the high, nominally. The precious metals complex is “technically” in correction. But what of the “real” price of gold, as measured in other asset markets?
Measured in stock market units, gold has not only not broken down, it has maintained its recovery.
Measured in oil, gold remains bullish. This is of particular note to the gold mining industry, as it is a positive “operational” fundamental for fuel-intensive miners.
And finally, the tricky one. As measured in silver units, gold made a double bottom just as the Silver/Gold ratio made a double top. However, as with the SGR’s unbroken daily chart uptrend, the GSR has not broken its downtrend from April. Complicating the situation further, we are evaluating whether these doubles (bottom & top) will signal resumption of the longer-term trends (up in the GSR & down in the SGR).
It’s relevant because these “metallic credit spreads” inform many other markets beyond the precious metals. Let’s just say that the asset market world, on balance, favors silver over gold.
Bottom Line
It’s holiday season and a lot of balls are up in the air. Markets may not be normal. But our options for the precious metals complex have been:
- Seasonal rally now (test of highs) that ultimately fails into another correction leg (favored)
- Seasonal rally after a hard drop to deeper downsides (ref. NFTRH 890) that is quite tradable (also favored)
- Correction ends now and a new leg up in the bull market begins (less favored)
Gold’s “real” prices vs. stocks and commodities beg an open mind with regard to #3, but would probably need its silver adjust price to drop (SGR rise and negate the double top). Especially due to holiday season and its less reliable signals. Alternatively, the SGR could resume dropping and the gold sector would be unique, as it was earlier in 2025 when the miners rallied against a positive Gold/Silver ratio.
I am maintaining the hedge for now. But again, open mind with all these moving parts. I am pleased to see the pictures of gold’s real price so firm. The GSR/SGR will be telling in the coming days/weeks.
