Technical Scoop: Precious Bid, Hormuz Hope, Declined Energy

By David Chapman

Excerpt from this week's Technical Scoop: Precious Bid, Hormuz Hope, Declined Energy

Gold and Silver Outlook

Is gold's low in? Many market observers are declaring so, or at least would like to believe that is the case. The author is not yet convinced. While the breakout this past week looks encouraging, and gold stocks appear to have broken a sharp downtrend line—as seen in the TSX Gold Index (TGD) chart—similar breakouts have appeared on other indices as well. The action is broadly positive, but the final low cannot yet be confirmed. A confirmed low is typically reserved for the making of new highs, and $5,600 remains a considerable distance away.

The five-wave descent labeled ABCDE could, in fact, be merely an A wave of a higher degree, meaning the market could now be embarking on a B wave of that higher degree. In Elliott Wave analysis, such corrective structures often precede renewed directional moves, but the interpretation hinges on whether the current rally sustains key resistance levels. Markets have entered a positive seasonal period that could extend into September and even October. However, the October–December window has historically been a weak period. Failure to make new highs during the current run could lead to another test of the lows—or even new lows—before a stronger upward move takes hold.

Approximately four years have passed since the important 2022 low, which places the current 7.8-year cycle roughly at its midpoint. The central question is whether the second half of the cycle will produce new highs or whether the market is entering a more prolonged downturn. Gold bulls anticipate the former, targeting new highs of $6,000 to $7,000, with some even calling for $10,000. While that remains possible, to date there is no technical evidence or confirmation of a bottom.

Key Price Levels to Watch

To confirm the low at $3,941, gold needs to break out above $4,400. A break and close above $5,200 would be needed to begin contemplating a run toward new highs. Only once new highs above $5,600 are achieved can attention shift to potential higher targets.

Silver occupies a comparable position. The decline from the January high of $121.64 has unfolded as either an ABC or a full ABCDE corrective wave. Silver will not break out until it moves above $70, and it needs to regain $106 to signal new highs. Until better price action materializes, the outlook on silver remains cautious.

The gold/silver ratio improved on the week and now sits at 68.37, well below the pandemic-era high of 126 reached in 2020. The ratio, which measures how many ounces of silver equal one ounce of gold, is commonly used as a relative valuation gauge; a lower reading typically signals silver outperformance, while elevated levels have historically coincided with broader risk-off conditions.

Weekly Performance Summary

Gold rose 7.3% on the week and turned positive on the year once again. Silver gained 9.9% but remains negative for 2026.

Gold stocks delivered an impressive performance: the Gold Bugs Index (HUI) jumped 21.9%, while the TSX Gold Index (TGD) rose 20.4%. Both indices are now positive year-to-date, with the HUI up 7.4% and the TGD up 8.3%. Platinum advanced 5.9%, and palladium gained 8%.

Copper made new all-time highs, albeit barely, with a 1% gain. Copper is viewed as the leader in this space, suggesting gold may move to catch up. That said, gold remains relatively expensive when measured against copper, as the Gold/Copper ratio continues to reflect elevated gold valuations. Even if gold begins to close the gap, copper could still outperform. Copper's role as an industrial demand bellwether means its strength often reflects broader economic activity expectations, which can diverge from the safe-haven drivers that typically lift gold.

Assessing the Rally

The past week's rally is a positive development, and the market appears to be embarking on another upward move. The key question is whether this rally will carry prices to new highs or whether it is merely a corrective wave responding to the January–July decline. The assessment leans toward the latter interpretation, though a breakout to new highs is expected eventually—potentially not until 2027.

Charts referenced: www.stockcharts.com

Read the full report: Technical Scoop: Precious Bid, Hormuz Hope, Declined Energy

Copyright David Chapman 2026.

Disclaimer

David Chapman is not a registered advisory service, an exempt market dealer (EMD), or a licensed financial advisor. He does not and cannot provide individualized market advice. He has worked in the financial industry for over 40 years, including roles at large financial corporations, banks, and investment dealers. The information presented is intended solely for informational and educational purposes and should not be construed as an offer, solicitation of an offer, or sale of any security. Every effort is made to provide accurate and complete information; however, no guarantees are made regarding accuracy, completeness, or adequacy. The reader assumes all risk when trading in securities. David Chapman advises consulting a licensed professional financial advisor or portfolio manager, such as Enriched Investing Incorporated, before proceeding with any trade or idea presented. David Chapman may own shares in companies mentioned. Although artificial intelligence (AI) may be deployed from time to time, AI output is monitored and adjusted for accuracy. Performance is not guaranteed, values change frequently, and past performance may not be repeated.