Stocks, Commodities, and Precious Metals at a Key Inflection Point, Says Gary Tanashian

By Gary Tanashian — Originally published at GoldSeek

Markets have turned bullish following the summer pullback, as widely anticipated. While one indicator tracked by NFTRH — a smoothing of the Equity Put/Call ratio using moving averages — did not push the SPX into a full correction, indexes such as the SOX (Philadelphia Semiconductor Index) and NDX (Nasdaq-100) experienced sharp declines. The SPX avoided deeper trouble through internal sector rotation, a dynamic in which capital shifts between market segments as investors reposition for changing conditions rather than withdrawing from the market altogether.

That rotation spanned multiple segments. AI-driven semiconductors gave way to a bottoming, basing, and rallying software sector. Large-cap technology — particularly AI hyperscalers — cycled back in, while healthcare segments such as biopharma and medical devices attracted capital. Rotation also extended from gold, silver, and gold stocks into the broader commodities complex that they typically lead. The breadth of this rotation across defensive and cyclical sectors alike underscored a market environment in which capital was seeking value rather than chasing a single narrative.

This behavior validated the NFTRH theme of maintaining diversification aligned with the market's internal dynamics. On a personal positioning basis, the author noted that this approach allowed him to navigate the correction in a manner similar to how the SPX itself chopped sideways. Regarding the prolonged correction in gold stocks that began in January, the author reported having largely sat it out, as the downturn was clearly identifiable in advance.

Crude oil was excluded from this commodity analysis because, according to the author, that market was destabilized by what he characterized as an ill-advised war. The stated preference in commodities remains with critical mineral producers and explorers, including copper (Cu), uranium (U3O8), nickel (Ni), rare earth elements (REE), lithium (Li), and platinum group metals (PGM). These materials are central to energy transition supply chains, electrification infrastructure, and national security stockpiling efforts pursued by multiple governments.

Gold/SPX Ratio at a Turning Point

The current environment represents what the author describes as an inflection point. Gold has been expected to hold a targeted low in relation to the SPX. Whether the Gold/SPX (GLD/SPY) ratio holds at current levels and turns up promptly, or consolidates sideways — potentially waiting until after the midterm elections to do so — the analysis frames this as a period of significantly reduced risk in gold and elevated risk in equities. The GLD/SPY ratio is widely used by macro analysts as a barometer of relative risk appetite between safe-haven assets and growth-oriented equities.

In the near term, however, nominal stock markets are expected to deliver a bullish performance into the midterms. The author references what he terms "Wizards" Warsh and Bessent — apparently referring to political and financial figures — as actively laying groundwork through bank deregulation designed to free up lending, a fiscal spending bill intended to stimulate the economy, and potential adjustments to the Treasury market should additional liquidity be required. The use of coordinated fiscal and regulatory stimulus around election cycles has precedent in prior administrations.

Gold, Commodities, and the Silver Signal

Rather than comparing gold to a broad commodity basket, the analysis focuses on a single ratio that could serve as a tailwind for most of the commodity complex — again excluding oil as it digests war-related disruptions — as well as for the precious metals themselves.

The author draws a parallel to 2025, when a broad commodity and stock market rally was identified well in advance, led by the precious metals. At that time, silver had declined sharply relative to gold, established a base, and was positioned for a rebound. A similar setup may be unfolding in 2026.

Silver's underperformance versus gold in 2026 is visible on charts, and a shaded technical pattern suggests a potential rebound may be forming. The RSI (Relative Strength Index) indicator appears to support the case for this reversal arriving sooner rather than later. Silver's industrial demand profile, tied to solar photovoltaic manufacturing and electronics, links its price action to both precious metals sentiment and industrial commodity cycles.

Precious metals bulls have endured a correction lasting roughly half a year. The author characterizes this extended pullback as having ground risk out of the sector, creating what he describes as fertile ground for a renewed rally.

Gold stocks are currently breaking out across multiple names, various critical commodity stocks are advancing, and stock markets are recovering. However, the author contends that if silver begins to outperform gold meaningfully, the current moves would pale in comparison.

Midterm Election Target and Historical Parallel

The author's bullish target extends through the midterm election, drawing a direct comparison to 2024, when the presidential election served a similar function. In 2024, the Biden administration employed stimulus measures; in the current cycle, the author argues that the Trump administration's team is pursuing comparable stimulation objectives through different mechanisms.

A bullish Silver/Gold ratio would function as a tailwind for many global markets and simultaneously act as a headwind for the US dollar. The author interprets the various policy measures as ultimately amounting to currency devaluation, which he describes as the oldest trick in the book.

Longer-Term Macro Outlook

Once the election and potentially the remainder of 2026 pass, the author expects conditions to deteriorate for the stock market. Gold, having undergone an extended period of underperformance relative to equities, has rebuilt its lower-risk haven appeal.

This big-picture macro view encompasses a sequence the author says was anticipated in advance: the breakdown in the SPX/Gold ratio, the subsequent rebound, and now an expectation of renewed failure in 2027, if not sooner. Stocks may not enter a nominal bear market, the analysis suggests, but they are expected to significantly underperform gold over the longer term.

Source: GoldSeek. The author, Gary Tanashian, publishes the financial market report NFTRH (Notes From the Rabbit Hole) at nftrh.com and can be followed on Twitter @NFTRHgt. His work has been featured at financial websites including GoldSeek and SilverSeek.com since 2004.