Gold Technical Structure Targets $4,800–$5,000 Despite Weak Momentum

Regardless of any assistance the US team received, the outcome against Belgium remained unchanged: elimination from the tournament.

Clearly, no matter what support governments provide to their fiat currencies in the battle against gold, the outcome remains the same: a knockout victory for gold.

A glance at the weekly chart highlights the strength of the technical setup, particularly the impressive positioning of the 14,5,5 Stochastics oscillator.

I recently recommended accumulating gold, silver, and mining stocks in the $4,100–$3,900 range while maintaining ample cash reserves to take advantage of any deeper pullback toward the $3,500–$3,200 area.

With those purchases now completed, investors can reasonably look forward to a recovery phase, with prices potentially advancing toward the initial profit-taking zone between $4,800 and $5,000.

What are the main obstacles facing gold? The conflicts in Iran and Ukraine have prompted some central banks to tap into their gold reserves, using bullion accumulated for difficult times. That selling has partially offset continued purchases by other central banks.

Meanwhile, the Indian government has taken a different approach. Rather than liquidating its own gold holdings, it has imposed tariffs and taxes that discourage gold ownership and purchases, potentially reducing demand by an estimated 50–75 tonnes per month.

In the West, many analysts continue to focus almost exclusively on gold’s lack of yield. Despite the metal’s remarkable advance from roughly $1,800 to $5,600 while interest rates remained around 4.5%–5%, they persist in arguing that higher rates are inherently bearish for gold.

This narrative overlooks a key contradiction: governments face growing challenges servicing massive debt burdens as interest costs rise, yet investors are often told to abandon gold and funnel capital into that same debt.

The issue is further complicated by official inflation measures such as CPI, PPI, and PCE, which many critics argue fail to fully reflect the inflation experienced by households. As a result, reported real interest rates may appear stronger than they are in practice.

Overall, the balance of probabilities now favors a move toward the $4,800–$5,000 range rather than a decline to $3,500–$3,200. However, central bank sales, weaker Indian demand, and persistent skepticism from Western analysts could keep gold’s advance gradual and uneven.

Many Western analysts also encourage investors to rotate out of gold, silver, and mining shares and into what they view as an increasingly expensive U.S. equity market—a strategy that carries significant risks.

Major bear markets often begin beneath the surface, with the more speculative stocks and broader secondary indexes weakening first while the Dow Jones Industrial Average continues to advance. That pattern appears to be unfolding today.

Investors holding these speculative names are frequently reassured that the Dow’s strength is evidence of a healthy market. The common belief is that their highly valued stocks will eventually catch up with the stronger-performing, more reasonably valued blue-chip shares and push to fresh highs.

Seasonally, July has historically been a favorable month for equities, while the August-to-October period has earned a reputation as a more volatile stretch and is often associated with major market corrections.

As speculative stocks lose momentum and the Dow continues to climb, rising valuation measures such as the Shiller CAPE ratio may signal growing market risk. In that environment, investors who have chased recent price gains rather than focusing on fundamentals could become increasingly vulnerable to a broader market downturn.

The silver chart continues to look exceptionally strong. In healthy bull markets, prices often find support before reaching widely recognized support zones, reflecting underlying buying pressure. Silver appears to be exhibiting that behavior at present.

The $50 level in silver roughly corresponds to the $4,000 area in gold, making both zones attractive from a value perspective. When markets enter these perceived value ranges, investors may benefit more from gradually building positions than from trying to pinpoint the exact bottom.

Rather than waiting for a perfect entry or a definitive final low, a disciplined approach of modest accumulation at attractive valuations can often prove more effective over the long term.

What about mining stocks? The daily CDNX chart continues to offer an encouraging technical picture. The market has already delivered several strong rebounds from the three accumulation zones established during the current consolidation phase.

The key question now is whether that consolidation has run its course and is setting the stage for a much larger advance. While no outcome is guaranteed, the evidence currently points to that being the higher-probability scenario.

Notably, the decline since mid-April has unfolded as a gradual drift lower rather than a sharp, panic-driven selloff. This type of slow, grinding weakness is often characteristic of consolidations nearing completion, as selling pressure gradually fades and the market prepares for its next directional move.

The GDX chart remains highly impressive from a technical perspective. A large bullish wedge pattern appears to be developing, with the ETF positioned near what many technicians would consider an ideal breakout zone. At the same time, silver is rebounding from the $50 support area, while gold continues to recover from the $4,000 region.

Fundamentally, many major mining companies are also in strong financial condition. Industry leaders such as Barrick Gold and Newmont maintain conservative balance sheets, with debt-to-equity ratios below 0.20, providing a solid financial foundation.

Taken together, the technical and fundamental backdrop remains constructive for both senior and junior gold miners. While risk management remains essential, current conditions suggest an environment that may favor gradual accumulation rather than excessive caution.