Precious Metals Phase 1 Is Ending, Setting Up Phase 2

Gary Tanashian

How We Got Here

2025 was a strong year for precious metals. Gold first broke away from the bearish market trend that had developed in late winter and spring, then the miners followed, and silver eventually took leadership from gold. Once silver took over, precious metals, critical minerals, and other commodities moved sharply higher, creating a very high-risk situation. As expected, that risk was eventually realized.

That was followed by the expected multi-month correction, which lasted about five months.

2026 Bull, Phase 1

Since early July, we had been expecting a tradeable bounce or rally in precious metals from a deeply oversold condition. Our main indicator was the 200-day moving average of the BPGDM — the Bullish Percent Index for gold miners, a breadth gauge tracking the percentage of gold-mining stocks on point-and-figure buy signals — shown as the green line, which had trended down to a higher low as expected.

By ignoring the noise in the spiky indicator itself, we were able to smooth the view and recognize an extremely low-risk setup rather than chasing the day-to-day spikes of the correction. Even as BPGDM is now spiking again and the precious metals complex has likely put in its ultimate lows, the 200-day simple moving average should continue trending lower and is expected to eventually form a higher low relative to the 2024 low. That has been our plan since January, and it remains on target.

On August 5, the rally finally became clear. Gold surged, silver surged, and the Silver/Gold ratio (SGR) continued to build a pattern from which it could eventually rise and lead Phase 2 of the 2026 bull market.

While the odds favor the SGR moving toward the orange 200-day simple moving average soon, its real leadership move will likely be reserved for Bull Phase 2, which is expected to see many commodity and resource stocks follow precious metals higher. The ratio earns that attention because silver straddles both monetary and industrial demand, tying it more directly to the wider commodity complex than gold.

At present, we are managing the gold-stock rally closely in NFTRH, using detailed technical analysis, including Fibonacci retracement levels and chart resistance, to identify upside targets for the HUI Gold Bugs Index, the NYSE Arca benchmark of gold-producing companies. We are also managing the parameters for the modest pullback now in progress.

Here, the focus is on GDX, the VanEck Gold Miners ETF and the largest fund tracking gold-mining equities, and that pullback, while upside targeting is reserved for NFTRH Premium. So far, GDX has held its 200-day simple moving average, and we can allow the immediate lower gap at 78.86 to fill without becoming overly concerned about the broader rally. The move began from positive RSI divergence — GDX making a lower price low while the momentum oscillator traced a higher low — much as the major correction began from negative divergence.

If GDX were to fall below the 200-day simple moving average and the 84-87 support area, we would need to consider whether the rally is ending sooner, at the lower of our two HUI-based objectives, rather than later at the higher target. As it stands, however, the rally remains very much intact.

As summer winds down, the broader stock market is a bigger concern than precious metals. The Gold/SPX ratio, or GLD/SPY ratio — a relative-strength comparison of the gold ETF against the S&P 500 ETF — appears to be bottoming where expected, at a higher low relative to the previous major low.

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

In the Interim

Seasonal averages for the stock market turn bearish into September. A view of VIX seasonality — the Cboe index derived from S&P 500 option prices and the market's most widely followed volatility gauge — as discussed by John Authers of Bloomberg Opinion, lines up with what we have recently been discussing in NFTRH. The party is likely to be interrupted before a fourth-quarter buying opportunity in broad markets.

2026 Bull, Phase 2

Given the low relative risk signaled by the Gold/SPX ratio, the BPGDM 200-day average, and other macro indicators, it is reasonable to favor gold, gold-stock, and silver leadership in connection with a fourth-quarter buying opportunity.

Throughout 2026, after calling precious metals high risk at the start of the year, we have emphasized diversity. Personally, I mostly sat out the correction, though I did make a few long and short trades. We have tried to stay aligned with internal market rotations, moving out of semiconductors, into biotech, into software, partially out of software, back into semiconductors, and into other areas as conditions changed. That approach has been profitable in 2026.

I remain long quality gold stocks, with a bias toward royalty companies, which hold contractual claims on a share of a mine's output rather than operating mines themselves, limiting their direct exposure to production costs. But after an interim rough patch, the best rotation is expected to turn back toward gold, silver, and the miners. NFTRH will continue to evaluate that process at each step, and I will personally continue managing cash, taking profits in high-flying positions across broad markets, including gold stocks, and reallocating into new rally candidates until the music stops.

When the music starts again, I expect to be positioned in precious metals and fully ready for 2027. That is how the macro picture looks at this time.

For top-down macro analysis and market strategy covering precious metals, commodities, stocks, and more, subscribe to NFTRH Premium, which includes a comprehensive weekly market report, detailed NFTRH+ updates, chart and trade setup ideas, and Daily Market Notes. Free public content is available at NFTRH.com, and readers can also subscribe to the free Substack.

About the author

Gary Tanashian

For top-down analysis of major markets, subscribe to NFTRH Premium, which includes an in-depth weekly market report, detailed interim market updates, and NFTRH+ dynamic updates with chart and trade setup ideas.

Follow on Twitter @NFTRHgt.

Gary Tanashian of nftrh.com ran a progressive medical component manufacturing company for 21 years, keeping its fundamentals aligned with global economic realities through multiple economic cycles. That experience led to an understanding of global macroeconomics as it relates to individual markets and sectors.

Biiwii.com, retired in 2019 because there were not enough hours in the day for two websites, was created in 2004 to communicate concerns about excessive debt and leverage in an inflated financial system. Those concerns were confirmed in 2007 as the system began to purge those distortions, culminating in the washout from October 2008 to March 2009.

The name biiwii.com came from the phrase “but it is what it is,” reflecting the need to remain impartial about markets despite personal beliefs. Over time, the world changes, and a successful market participant must be ready to accept changes or revisions to a plan.

Technical analysis, human psychology, and unique macro market ratio indicators were later added to the mix, producing Notes From the Rabbit Hole (NFTRH), a financial market report designed to remain effective across market environments.

Since 2004, the work has been featured on financial websites including GoldSeek and SilverSeek.com.